Civ Pro Whole Outline

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Anatomy of the Litigation

Pleadings FRCP 7, 8, 9(b)
Rule 7 Pleadings allowed lays out the types of pleadings allowed (i.e. complaint, answer, etc.) Rule 8 General Rules for Pleading a) Short and plain statement of the claim showing that the pleader is entitled to relief and grounds upon which jurisdiction depends, and what you are seeking. You dont have to prove your case, just state what you need to get into court b) Defenses state a short and plain statement of affirming or denying each claim asserted against it and its defense against each claim; can deny parts; failure to deny is taken as a truth a. There are general and specific denials c) Affirmative Defenses response to pleadings, including: Assumption of Risk, contributory negligence, estoppel, fraud, res judicata, Statute of Limitations, etc. a. Mistaken designation of a defense as a counterclaim or vice versa, the court must treat the pleading as it was correct d) Pleading should be Concise and Direct Rule 9(b) Pleadings of Special Matters Fraud or Mistake a) Party must state the particular circumstances constituting fraud or mistake b) Malice, intent, knowledge, may be alleged generally. Notice Pleading Under FRCP Started in the 1930s, to get rid of the technical forms of pleading. Common law pleadings Code System Notice Pleading under FRCP - Under FRCP the only thing we are trying to accomplish with pleadings is notice (Rule 8) Conley v. Gibson US SC 1947 Pleadings as Notice-Giving FACTS: African-American union workers accuse union of racial discrimination. They lost their jobs and union did nothing to help them. Dismissed for bad pleadings. Reversed by SC. RULE: FRCP do not require a claimant to set out in detail the facts upon which he bases his claimall the rules require is a short and plain statement of the claim that will give the defendant fair notice of what the plaintiffs claim is and the grounds upon which it rests. Should not be dismissed for failure to state a claim unless it appears beyond a doubt that the P can prove no set of facts in support of his claim which would entitle him to relief. Objections to Notice Pleading System - It doesnt do enough to weed out loser cases; federal docket will get clogged with losers o In many instances (anti-trust) discovery becomes expensive, so as soon as a complaint gets through the door D will settle even if it knows it did nothing wrong - D will not know how to appropriately respond because the claims are unclear For Notice Pleading - Cases shouldnt be decided on technicalities; people with a valid claim shouldnt be denied a trial, especially when they dont have a lawyer. Swierkiewicz v. Sorema, N.A - SC US 2002 Required Pleading Standards FACTS: Petitioner, Hungarian worked for the NY subsidiary of a French insurance co. The boss then gave his job function and title to a younger Frenchman, like himself, who had less experience. Petitioner claims employment discrimination. D says that he did not make out a prima facie case, thus not meeting the pleading requirements of 8(a)(2). ISSUE: Does employment discrimination have heightened pleading standards?
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RULE: Employment discrimination complaint need not include specific facts establishing a prima facie case of discrimination. Court says Rule 8 sets out minimal requirements for pleading and this does not include a prima facie case. Only those instances in Rule 9 are exceptions, and this isnt one of them. CoA arguments went against Rule 8(a)(2). Quoting Conley statement must simply give the defendant fair notice of what the plaintiffs claim is and the grounds upon which it rests. STANDARD: a complaint should not be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief Bell Atlantic Corp v. Twombley US SC 2007 - Heightened Pleading Standards Fraud and Conspiracy. Changed pleading standard from conceivable to plausible. FACTS: After Congress passed Telecommunications Act of 1996 stating all local providers must give access to other larger providers, Bell Atlantic brought a complaint alleging conspiracy (parallel conduct) under Sherman Act (anti-trust) among local providers not to allow Bell Atlantic in. DC dismissed complaint for failure to state a claim upon which relief can be granted. CoA reversed, then SC reversed and dismissed case. ISSUE: Have Ps alleged enough facts in their complaint from which a conspiracy to violate Sherman Act can be inferred? RULE: Claim needs to have more than just allegations of parallel conduct and conspiracy. They needed to provide a complaint with enough factual matter to suggest such conduct existed. We require enough facts to stat a claim to relief that is plausible on its face. Because the plaintiffs here have not nudged their claims across the line conceivable to plausible, their complaint must be dismissed. Said that circumstantial evidence of parallel behavior may be a legitimate argument in conspiracy allegations, that does not yet apply for the Sherman Act (anti-trust). Casts doubt on Conley, says earned its retirement and is misunderstood, and an interpretation. DISSENT: Just because it will cost a lot of money and it will require a lot of case management on the part of the Judges to make sure that the Jury is not mistaken on their tasks does not make it right for the case to be dismissed prior to a response from the defendants. Conley Court knew that the FRCP meant to codify does not require, or invite, the pleading of facts. STANDARD: Plausibility standard claims are valid only if they allege facts that plausibly suggest a conspiracy. Suggestive facts need only be alleged. HOW DOES COURT GET TO THIS DECISION?? Rule 8(a) still requires a showing, rather than a blanket assertion of entitlement to relief Rule 1 just, speedy, and inexpensive court is worried about speedy and inexpensive Court doesnt want settlement of non-meritorious claims Court says they are not extending rule 9 we are not particularizing by implementing new standard of plausibility Caselaw: o Conley need to retire no set of facts language; also said that Conley stated complaint should give P fair notice and grounds for relief, this complaint did not o Swierkiewizc court says it did not change the law of pleading, simply re-emphasized specific facts o Erickson v Pardus only need complaint to give fair notice to D of claim and grounds which it lays upon TWO WAYS TO READ TWOMBLEY Narrow complex legal standards will require more in depth complaint to address necessary allegations
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Plausibility Standard need to show facts where it is necessary to push the complaint over the line so it is plausible see Iqbal RULE
Enron Complaint Why so long?? (Other than long list of Ds) Discovery is linked to what you got in your complaint, and one reason to include all this is to get discovery into more of their issues Scare the defendant (intimidation), you have the money and lawyer power to continue this Who are the audiences of this complain?? Def and their lawyers, court/judge, media outlets, regulatory commissions (SEC), your client, yourself (as the lawyer) to keep the everything organized Disadvantages - Piss of judge, too much of a preview (strategically maybe not the best idea), diminishes the major points if you add a lot of stuff US v. Iqbal Supreme Court 2nd Cir 1937. Qualified Immunity as Defense FACTS: P was taken into custody shortly after 9/11, plead guilty to defrauding govt to stay in country. P is suing for harsh treatment in jail. Ds (including Ashcroft, and a bunch of high ups in FBI) filed for motion to dismiss on grounds of qualified immunity. Under qualified immunity P must plead specific facts to overcome QI at the motion to dismiss stage. ISSUE: Whether a defense of qualified immunity needs more than normal plain and simple statement? Did Iqbal plead factual matter that as true states a claim that he was deprived of const. rights? RULE: Two Pronged Iqbal Standard: a) First, you decide if its a legal fact or a conclusion b) If its a conclusion, then there is no entitlement to it being true c) If there is a well-pleaded factual allegation, then the court should assume its veracity and determine whether or not it plausibly gives rise to an entitlement to relief
Notice Pleading Restoration Act Pending Legislation in Congress: Federal courts can not dismiss a complaint for 12(b)(6) failure to state a claim upon which relief can be granted and 12(e)motion for a more definite statement when the complaint is so vague or ambiguous EXCEPT under the standards set forth in Conley v. Gibson (that a complaint should not be dismissed "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.") Arguments for: broader standard for allowing cases to go to trial, gives plaintiffs a chance to allow evidence into discovery. Most cases are settled during the discovery period anyways, this allows a chance for plaintiffs to present concrete evidence, if they have it. SC did say that Iqbal could have gone to court about the injuries he suffered. Arguments against: a loose standard, not an explicit one. current standard is strict, it leads to less cases reaching the trial level and thus the possibility of justice not being served. However, if can slow down the judicial process, which costs time and money, and would possibly allow more suits without basis. It would allow conclusory statements to be taken as true.
Defendants Responses FRCP 8(b) and 12

PRE-ANSWER MOTIONS: Advantages: A. Permits D to raise objections to the action at an early stage ( answers are expensive) B. Pre-answer motion extends time for filing an answer -Defendants Answer must respond to allegations of the complaint (Rule 8(b)). -Three possible Responses: 1. Admit, (when you admit, whether it comes out later it was truly false does not matter, you already admitted to it) 2. Deny, or 3. Lack Sufficient Information to Admit or Deny this has the effect of a denial -If Defendant fails to Deny something, then that issue is considered Admitted by Defendant (only exception is Damages) (Rule 8(d)). -Answer also Raises Affirmative Defenses outlined in Rule 8(c). Affirmative Defense injects a new Fact and if Defendant is right then Defendant wins. Must be appealed in Answer, run the risk of waiving the right to Affirmative Defense. Rule 12(b) responses look at Rule 12(g)-(i) to determine when they can be used. FRCP 12 (a) Time to serve a Responsive Pleading Changes after December 1, 2009 D must serve answer within 20 days of being served (21 after 12.1.09) FRCP 12(b) Defendants responses Defenses must be made in an answer pleading, but the following may be made by motion. 12(b)(1) lack of Subject Matter Jurisdiction Most Favored 12(b)(2) lack of personal jurisdiction - Disfavored 12(b)(3) improper venue Disfavored 12(b)(4) insufficient process Disfavored - challenges adequacy of the summons itself (missing signature or seal) 12(b)(5) insufficient service of process Disfavored 12(b)(6) failure to state a claim upon which relief can be granted; motion to dismiss Only one questioning legal sufficiency of the allegations in the complaint not recognizable as a violation of any legal rights - Favored o If Ps proves the allegations in completing, will he have established a cause of action entitling him to some form of relief from the court? o Either sought relief that is not recognized or failed to allege necessary elements of a claim, that would be recognized under the law 12(b)(7) failure to join a party under Rule 19 Favored Rule 12(h): Waiving and Preserving Certain Defenses II. 3 categories: A. Disfavored Defenses-must be brought up in first response or else waived forever 1. Lack of personal jurisdiction 2. Improper venue 3. Insufficient process 4. Insufficient service of process B. Favored Defenses-can raise in any pleading or by a motion or at trial on the merits (bu not on appeal) 1. Failure to state a claim upon which relief can be granted
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2. Failure to join a party under Rule 19
C. Most Favored Defenses-may be raised at any time

1. Lack of subject-matter jurisdiction
III. Note: Does not matter whether, at the time of the filing of the pre-answer motion, the D was
unaware of the facts on which it would base the additional defenses of improper venue and indispensable party, or any other motion. Must raise motion based on whether its disfavored, favored, or most favored. Rule 12(g): Says what has to be consolidated in one pre-answer motion IV. Except for favored and most favored defenses, a party that makes a pre-answer motion must not make another pre-answer motion raising a defense or objection that was available to the party but omitted from its earlier motion. A. So once a pre-answer motion is filed, defenses left out of this pre-answer motion cannot be filed under another pre-answer motion, except: 1. If omitted defense or objection was unavailable to party a. So matters what you know; must do something reasonable to find out (think very hard before skipping a defense that is waived) 2. Subject-matter jurisdiction can be raised at any time 3. Failure to state a claim for relief or failure to join a party under Rule 19 may be raised in another pleading, by a motion, or at trial on the merits
Filing of a pre-answer motion under Rule 12 affects time periods for filing responsive pleadings. If the court denies, the defendant has 10 days to file an answer. If the court grants, plaintiff will be granted leave to amend or the suit will be dismissed Rule 12 (g) and (h)s purpose to is to prevent the pleader from using multiple pre-answer motions for different defenses and from omitting certain defenses from motions or answers.
12(b)(2)-(5) - Disfavored Defenses must be brought up in pleadings the first time defense responds or cannot be brought up again. EITHER NOW OR NEVER (FRCP 12 (h)(1)) If you bring one up, you must bring all that you want to use at that point, be it pre-answer or in your answer. May only be raised once. If you leave it out of your motion, you cannot include it in your answer if motion is denied. Cannot be appealed if not brought up. 12(b)(6),(7), Favored Defenses, failure to state legal defense can be raised at pleading, motion for judgment, or at trial (FRCP 12 (h)(2)) 12(b)(1) Most Favored Defenses can be raised anytime in any motion, pleading or a trial (FRCP 12 (h) (3)) David v. Crompton & Knowles Corp. US DC EDPA 1973 Not Precedent Admitting/Denying Averments FACTS: David was injured by shredding machine that his company bought from Hunter. Hunter was sold to Crompton in 1961. D wants to amend answer on grounds it did not have sufficient knowledge or information to admit or deny allegation. Wants to deny it made the machine. Want to amend claim to say that they are not responsible for machines by Hunter prior to takeover. Recently discovered this in their contract.
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ISSUE: RULE: Whether knowledge of an agreement that existed holds you responsible for knowing the intricacies of that agreement and whether you are allowed to use the claim of lack of sufficient knowledge or information (as in Rule 8(b)) in this case? Mesiro v Duggan if the knowledge of the alleged was in possession and control of the defendant, then they are not allowed to use lack of knowledge as a claim hence, it is considered an admission of the complaint. Contract was in the control of the D, he knew or should have known of the details even 9 years after the purchase. P allegation should be deemed admitted by D. Would have been fine for them to say they did not have enough knowledge, but they had control of the documents, so they did not do so honestly; hence, they reason why they were not granted leave to amend. Once an allegation is admitted, it is taken as true for purposes of the case, even if it is not true (unless there is reasonable excuse as why they admitted to it).
Affirmative Defenses Rule 8(c)
Denial: just negating the plaintiffs claim. Youre not admitting anything. (if you can just deny a charge, you should do that instead of trying to find an affirmative defense) Counterclaim: something based on new info and asking for relief from the plaintiff Affirmative defense: excuse or justification for plaintiffs complaint as an answer, even if that is denied at trial. (yes, I committed battery, but I am a cop, or is a release/waiver is signed) Rule 8(c): if responding to a pleading, a party must affirmatively state any avoidance or affirmative defense, including Release, res judicata, licenses, laches (Negligence or undue delay in asserting a legal right or privilege), etc.
If affirmative defense is not pleaded, issue is not in the case, and evidence relating to this issue is inadmissible. Cannot be raised in trial, must be in pleadings. If def has admitted essential allegations and not pleaded affirmative defense, plaintiff can ask for motion judgment on the pleadings tests the legal sufficiency of all pleadings. Or, if the def pleads affirmative defense, plaintiff can ask for judgment based on his affirmative defense lacks sufficient legal backing.
FRCP Rule 11 Signing pleadings, motions, representations to the court, sanctions

MECHANISMS FOR POLICING B. Rule 11: Signature, representation to the court, sanctions; inapplicability to discovery C. Certification by Signing (Rule 11(b)) 1. Zuk v. Eastern Pennsylvania (US Court of Appeals, 3rd Circuit 1996) a. Facts: P (psychologist on Ds faculty) had duplicates made of film of two of his family therapy sessions so they could be rented from Ds library; P wrote book registered with US Copyright Office of Admissions; P was temporarily asked ot leave and he asked that copies of his tape be returned to him; he filed suit alleging D rented out films and infringed on his copyright. Ds 12(b)(6) motion is granted. b. Holding: Court did not err in imposing sanctions because 1)P failed to sufficiently investigate facts of case (need at least public sources and interview with client) and 2) did not educate himself well enough as to copyright law (made frivolous argument under copyright law) c. Rule 11 (b): Representations to the Court: by presenting to the court, a pleading, written motion, or other paperwhether by signing, filing, submitting, or later advocating itan attorney or unrepresented party certifies that to the best of the persons knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: i. Inquiry into the law: Rule 11(b)(2) requires all claims, defenses, and legal contention be warranted by existing law or by nonfrivolous argument for extension, modification, or reversal) ii. Inquiry into the facts: Rule 11(b)(3) the factual contentions have evidentiary support, or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery i. Rule 11 is not a license to make claims without any factual basis of justification ii. Note: what is reasonable in a pleading is very subjective: 1. Zuk fills this in (need to do a thorough interview with client; probably need to look at whats publicly available) 2. Iqbal and Bell Atlantic: enough facts to be plausible D. Sources of Sanctioning Power: 1. Sec 1927: statutory provision aimed at attorneys (applies to all conduct, not just signed papers) a. Fed. courts of appeals are split on whether requires subjective bad faith showing (big requirement) or recklesness 2. Rule 11: reaches both attorney and client 3. Inherent power of fed courts to discipline attorneys and parties who appear before them E. Sanctions (Rule 11(c) 1. Note: in Zuk, trial court erred in invoking severe penalty without comment
8 2. Note: may include nonmonetary directives, but monetary sanctions are limited
against the client (see Rule 11(c)5)
3. 11(c)(1) In General: court may impose an appropriate sanction on an attorney,

law firm, or party that violated the rule or is responsible for the violation. Absent exceptional circumstances, a law firm must be held jointly responsible for a violation committed by its partner, associate, or employee. 4. 11(c)(2) Motions for Sanctions: a. safe harbor! (see language below): even if there has been a violation, court may impose sanction on motion only if the violator has been warned and invited to desist (has 21 days to correct) b. motion for sanctions must be made separately from any other motion and must describe the specific conduct that allegedly violates Rule 11(b) must not be filed or be presented to the court if the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately corrected within 21 days after service or within another time the court sets. 5. 11(c)(4) Nature of a Sanction: may include nonmonetary directives; an order to pay a penalty into court; or, if imposed on motion and warranted for effective deterrence, an order directing payment to the movant of part or all of the reasonable attorneys fees and other expenses directly resulting from the violation. 6. 11(c)(5) Limitations on Monetary Sanctions: the court must not impose a monetary sanction: a. against a represented party for violating Rule 11(b)(2); or b. on its own, unless it issued the show-cause order under Rule 11(c)(3) before voluntary dismissal or settlement of the claims made by or against he party that is, or whose attorneys are, to be sanctioned. An attorney should make a reasonable inquiry into the facts before making a complaint a) must be signed by an attorney b) conduct: by signing, attorney is representing to the court that this is to the best of your knowledge, not frivolous, to establish new law, you have evidentiary support, o 3) good faith belief that there will likely be evidentiary support after a reasonable opportunity for further investigation or discovery c) Sanctions o 1) court may impose sanctions on entire firm o 2) Motion for sanctions must be made separately and describe specific conduct that violates rule 11(b) o 3) court may on its own sanction o 4) sanction is to deter from future bad behavior o Safe Harbor a party can withdraw the pleading to avoid a sanction Why do we need a motion like that? 3 problems created by liberal notice pleading standard 1. Bad faith poorly intentioned people filing complaint; strike suits just to harass D 2. Fishing Expedition - suits that are not based on any known facts 3. Stupid claims like prisoners chunky Peanut Butter
Amended and Supplemental Pleadings Rule 15

-Why does Rule 15 so freely allow amendments? - We want cases decided on merits and not on technicalities - Liberal amendment requirements go hand in hand with liberal pleading requirements - Courts allow amendments unless they find really good reasons not to o Party asking for amendment acted in bad faith, had prior opportunities, and party opposing amendment will be unduly prejudiced (not just prejudiced)
V. AMENDMENTS TO PLEADINGS A. Rule 15: Ways of Amending:

1. BEFORE TRIAL a. Rule 15(a)(1): Amending as a Matter of Course i. 15(a)1)(A)-(B) P can amend only once as a matter of course: 1) before being served with a responsive pleading or 2) within 20 days after serving pleading if responsive pleading is not allowed and action is not yet on trial calendar i. 15(a)(3): unless court orders otherwise, any required response to an amended pleadings must be made within the time remain got respond to original pleading or within 10 days after service of amended pleading, whichever is later b. Rule 15(a)(2): Other Amendments i. A party may amend its pleading only with the opposing partys written consent or the courts leave. The court should freely give leave when justice so requires. ii. Interpretation: Gives lots of discretion to the judge; allowing to change now shouldnt hurt the other side too much (Factors: bad faith, prejudice, and undue delay) 2. DURING OR AFTER TRIAL a. Rule 15(b): Party tries to introduce evidence that is not raised during pleadings (variance) i. 15(b)(1) if an objection: if party objects that evidence is not within issues raised in pleadings, court may permit pleadings to be amended if doing so will aid in presenting the merits and the objecting party fails to satisfy the court that the evidence would prejudice that partys action or defense ii. 15(b)(2) if no objection: when issue not raised by the pleadings is tried by the parties express or implied consent, it must be related in all respects as if raised in the pleadings. B. Why does Rule 15 so freely allow amendments? 1. Court wants cases decided on the merits not on technicalities 2. Pleadings sometimes have to be filed when very little is known of events C. Cases: Permission to Amend 1. David v. Crompton & Knowles Corp (US District Court, Eastern District of PA, 1973) a. Facts: same as above; Crompton designed manufactured and sold shredding machine to Ps employer. D wants to change answer to deny that
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Hunter designed, manufactured, and sold machine before Crompton bought Hunter. Statute of limitations ran out b. Issue: should Crompton be permitted to amend its answer to deny allegation? c. Holding: No. Cromptons motion to amend answer was denied because of undue delay by D which would result in prejudice to P if Ds motion is granted bc P relied on D manufacturing the machine i. Action was filed more than 11 months prior to running of statute; D never gave any indication that it was asserting such a defense; P relied on Ds answer for long period of time; D should have been able to find contract (they knew of this and had possession of contract); if P had received timely notice of defense P would have had sufficient time to investigate relationship btwn Crompton and Hunter and determine which is proper party to sue 2. Aquaslide HYPO: complaint for personal injury on waterslide, D admits that it designed and manufactured waterslide (bc three major insurance companies say its an Aquaslide); eventually exec visited site and says its not an Aquaslide; compare to Crompton (in both: statue of limitations has run, D wants to amend) a. But in Aquaslide, the delay was reasonable (not undue) bc D relied on insurance companies and as soon as D found out, D did everything it could to notify P whereas in Crompton, they had full possession of info and didnt look into contract 3. Take-Away: Its a balancing act: need to look to see if there is prejudice from an undue delay bc P relied on D but also what the moving party was reasonably expected to do D. Rule 15(c): Relation Back Amendments (WHEN ADDING/CHANGING NAME, DEFENSE, CLAIM) 1. Definition: When Amendment to complaint enters new element and it would be tardy under statute of limitations (statute of lim has already run), the amendment is considered not tardy if it relates back - treats amendment as it is filed within statue of limitations a. Rule 15(c): an amendment to a pleading relates back to the date of the original pleading when: i. Amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set outor attempted to be set outin the original pleading; or ii. Amendment changes the party or the naming of the party against whom a claim is asserted and party to be brought in by amendment 1. will not be prejudiced in defending on the merits 2. knew of should have known that the action would have been brought against it, but for a mistake concerning the proper partys identity 2. Goodman v. Praxair, Inc. (US Court of Appeals for Fourth Circuit, 2007) a. Original Complaint: lobbying free vs. Praxair Services, Inc. b. Amended Complaint: lobbying fee against Praxair, Inc. (subsidiary of Praxair Services, Inc.) i. Note: under statute of limitations, P was barred
11 c. Issue 1: Can court grant 12(b)(6) motion to dismiss based on statute of

limitations defense? i. No. Ordinarily defense based on statute of lim. needs to be raised through an affirmative defense and the burden rests on D, but sometimes where facts necessary to rule on affirmative defense are sufficient on the face of the complaint, defense can be reached by motion to dismiss (12(b)(6)) i. Here: not clear from face of complaint when payment was due (when statute of lim had run) so cant be decided 1. note this is strange bc of Iqbal which would perhaps say this is an insufficient complaint d. Issue 2: Does the amendment adding the party relate back to the date of the original pleading, saving the complaint? i. Yes. No unfairness here from having Praxair Inc. in as D in amended complaint i. Bc of the corporate relationship, D should have known that they were being sued and there should be relation back ii. Rule 15(c)(1) and 15(c)(2) focus on notice to new party and effect on new party that amendment will have 3. HYPO: Original complaint alleges negligent malpractice. Proposed amendment adds claim for failure to obtain informed consent. After statute of limitations has run, D wants to add claim that D totaled car in parking lot? a. No. would not be allowed to relate back to amendment because did not arise out of same conduct, transaction, or occurrence. 4. HYPO 2: Blind law student sues law school for not letting him go onto second yr. Complaint alleges that school discriminated against him by making him have in-class exams and particular GPA before advancing. After statute of limitations has run, P wants to add due process claim on ground that school had provided no written procedure concerning his right to appeal denials of his petitions to the school. a. Note: this is new claim against same D so were fighting over Rule 15(c) (1)(B) i. Could argue both claims are about his failure to proceed to next year (so can related back bc arises out of same occurrence/conduct
Amendments Before Trial 15(a)(1)Amendment as a Matter of Course: Each party can amend once as a matter of course regardless of anything. o Party can amend complaint after 21 days after serving 15(a)(2)Other amendments o Party can amend only with writted consent or the courts will o Court should give leave when justice so requires Amendments During and After Trial 15(b)(1) Based on an objection at trial
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If party objects that evidence is not within issues raised in pleadings, courts can permit pleadings to be amended Cant amend if it will prejudice the other party o Court can grant continuance to enable objecting party to meet the evidence 15(b)(2) For Issues Tried by Consent o when issue not raised by pleading is tried, it must be treated as if raised in pleadings o failure to amend does not affect the result of the trial of that issue o
Relation Back of Amendments Rule 15(c)(1) can relate back to the original date of pleading when o 15(c)(1)(A). relates to occurrence or series of transactions of the original complaint or when SoL for action permits it o 15(c)(1)(B). Amendment asserts a claim or defense that arose out of the conduct from the original pleading o 15(c)(1)(C). Allowed when changes a party or name of party without prejudice to defendants brought in and that they knew or should have known that they were going to be brought into the claims were it not for a mistake concerning identity of party must also be out same occurrence Becomes important where the applicable SoL has expired and relation back is the only way the new allegation will be treated as if it were timely Goodman v. Praxair Inc. Relating back Amendment on Face of complaint ISSUE: Can the district Court, from the face of the complaint, determine when the statute of limitations had expired? Could you grant a motion to dismiss on statute of limitations? RULE: Three reasons to relate back: 3 reasons to relate back: claim in the amended complaint arose out of the same transaction that formed the basis of the claim in the original complaint. the party to be brought in by the amendment received notice of the action such that it will not be prejudiced in marinating a claim it should know that it would have been originally named a defendant, but for a mistake, didnt.
What about undue delay can court reject amendment for undue delay alone, w/o prejudice or bad faith? - Yes in Civil Action, Ps are fighting against time because of money. We also need to create incentives for people to be as good as they can be. - For the other side, say that if theres no bad faith or prejudice theres no reason to allow the merits of the case to be stifled. Amendments can come up in 3 situations 1. Right after a pleading is filed 2. Trial hasnt started, but discovery has. New facts have come to light, and everyone wants to change their pleadings. 3. Parties realize theyve been arguing about something that isnt in the pleadings or that a party has admitted something not in the pleadings. Rule 15(b)
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Discovery Rule 26
Very particular to US, no other legal system has this extensive of a discovery system; often throws off foreign companies b/c they do not expect this Discovery is the process by which: o Parties are allowed to find out relevant facts o Narrows the disputed issues o Both parties are allowed to evaluate their cases (could lead to settlement) o The Primary function is to inform both sides Rule 26- The Rule on discovery o (a)(1)- INITIAL DISCLOSURE (STUFF THAT MUST BE INCLUDED) o (a)(1)(A)- Must always disclose information about people with discoverable discoverable information; copies of all documents, e-information, etc. that could help with the partys claims/defenses; o (a)(1)(B)- Lists things exempted from initial disclosure. Mainly issues dealing with lawsuits against the government and claims brought by prisoners. o (a)(1)(D)- if party joins after that conference, they have 30 days for initial disclosure.
o (a)(2)- DISCLOSURE OF EXPERT TESTIMONY o (a)(2)(A)- Must ID all experts o (a)(2)(B)- Must submit written reports that will include the experts testimony, the
o information the expert uses, exhibits, qualifications, other cases experts testified in, how much they were paid. (a)(2)(C)
o (a)(3)- DISCLOSURE OF WITNESSES

Must ID witnesses, give a transcript of their deposition, ID any documents/exhibits that will be used/submitted These disclosures must be made 30 days before trial.
Scope Rule 26(b)(1) may obtain discovery for any non-privileged information that is relevant to the partys claim -Non-privileged protects attorney-client privilege; some language in the rule saying agreements can be made b/w parties about giving back privileged stuff when accidently giving privileged materials -Privileged Materials There are 4 requirements (attorney-client): 1) must be communication; 2) comm. must be kept in confidence 3) need to be acting in respective roles; and 4) must be comm. that is for purpose of soliciting legal serv. -Courts have discretion; need not be admissible as evidence so long as it leads to admissible evidence Limits Rule 26(b)(2)(C) court can limit discovery if: -Unreasonably duplicative -Can be obtained in a more convenient, less burdensome, or less expensive -Too much time is being taken up -Burden of expense outweighs the benefit E-Discovery (Limits of) Rule 26(b)(2)(B) party does not need to provide information that is too much of a burden or too expensive to reasonable access -Party claiming it is too expensive, needs to prove it undue burden or cost
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-Still up to courts discretion b(5)- Claiming privilege: must (i) make a claim; (ii) describe nature of documents that are being claimed privileged.
o (c)- PROTECTIVE ORDERS- can move for a protective order under this Rule if you do
not feel you need to disclose certain information.
o (d)- no discovery before 26(f) meeting o (f)- CONFERENCE- Should be ASAP or at least 21 days before Rule 16(b) scheduling
conference. Allows parties to develop plan and potential resolve of case. The parties are required to report to court within 14 days after this conference with a discovery plan. Discovery plan must state proposals on: any changes in disclosure under 26(a), subjects for discovery and when it should be completed, any issues about ematerial, any issues of privilege/protection, any changes on discovery limitation, and a catch-all anything else. o (g)- SIGNATURES- everything must be signed. If not signed, invalid. Signature also bounds parties and makes them eligible for Rule 11 sanctions if necessary. Discovery Devices there are legal limitations to devices (Rule 27-35), here are some important ones: Initial Disclosure implemented to reduce some of the costs and adversary maneuvering in the 80s, by forcing lawyers to turn over core materials before formal discovery began o Used in attempt to persuade the other side to drop a claim or defense o Rule 27(c)(1) forbids use of material that should have been disclosed but were not o The possibility of surprise during deposition has been minimized Document Inspection Rule 34 permits parties to request documents for copying or inspection o Documents requested must be in the parties possession, custody, or control or influence over (bank statements an extension of control); can go on property Interrogatories Rule 33 allows party to send written questions to another party that must be answered under oath; could allow pre-trial discovery inexpensively, but doesnt get the job done o Can be ABUSED - too many questions asked, too much information to put in an answer. o May provide the predicate for a motion for summary judgment based on non-existence of evidence supporting a critical part of the plaintiffs case Deposition questioning a witness/party under oath, usually not in the court, with the witnesses lawyer present. Makes for intense preparations for both sides, most expensive device of discovery o Woodshedding the witness preparing the witness on what questions are going to be asked and how to respond by giving as little information as possible Physical or Mental Examinations Rule 35(a) says that when the mental or physical condition of a party or a person under legal control of a party is in controversy a court may order the person to submit to an examination by a licensed examiner Challenges of E-Discovery Most companies use electronics as way to store data o Two major challenges are volume and dynamic databases (data only comes up when you put in the proper queries/fields) o Resolution of some of the issues: Form of production amendment to rule 34 says that you have to request the way you want the information Inaccessible material there are 5 catagories of data 1) active online data (easily accessible 2) near-line data quickly accessible, 3) offline storage removable disks 4) Backup tapes need to be restored to read, and 5) deleted or damaged
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First 3 are accessible (stored in readily usable data) latter 2 are not considered to be Amendment to Rule 26(b)(2) would relieve a responding party of the obligation to provide not reasonably accessible data

I.
Spoilation Rule 26(f) would direct the parties to discuss preservation of evidence nre rule 37(f) would forbid sanctions against party for lost information caused by routine operations of its IT systems
Purposes: A. Means for changing settlement value i. How much a case should be settled for depends on law and the facts (takes long time to find out); discovery as prerequisite for negotiation; can be used as a way to change settlement value by wearing down the other side B. When tried, prevent surprise at trial II. Courts have lots of discretion: 1) can limit by court order (Rule 26(b)(1)) or 2) for good cause can order discovery over rel matter (Rule 26(b)(1)) and 3) court MUST make motion on its own to limit frequency or extent of discovery in certain circumstances (see Rule 26(b)(2)(C)) III. Discovery Sequence and Tactics: A. First, establish facts through pleadings; complaint is often ps first discovery device (establish some central facts early on that could greatly assist subsequent discovery motions or a defense vs. a motion to dismiss or motion for SJ) B. Rule 26(f)(3) directs parties to confer and design a discovery plan shortly after suit is filed and to submit plan for consideration tin connection with scheduling order i. Some begin with interrogatories to get basic info, but most see production of docs initially to get a full grounding in documentary side of case ii. Interrogatories maybe necessary to locate docs and witnesses, request for docs to obtain materials needed to prep for depositions, and depositions to lay groundwork for a request for a med examination Hickman v. Taylor (US 1947)- Pupose of Discovery discovery serves as a device along with pre-trial hearing under Rule 16 to narrow and clarify basic issues between parties and as a device for ascertaining fact, relative to those issues iii. Rules restrict pleadings to task of general-notice giving (though question this after Iqbal and Twombly) making discovery process vital for trial prep
Purpose of FRCP 26 is to narrow and clarify basic rules between parties and to ascertain facts and learn whereabouts of other facts. Now there will be no fishing expedition.
In Re Convergent Tech Securities Litigation,- S.D.C.A.. 1985 Rule change re: overbroad discovery RULE: All the money spent on discovery shows that there is a breakdown in what is supposed to be self-executing. Courts do not have time to settle disputes over discovery. No longer sufficient as a precondition that info sought appears reasonably calculated to lead to the discovery of admissible evidence. Zubulake v. UBS (US District Court, SDNY 2003) E Discovery Overview: comes down to what info is accessible versus inaccessible; when inaccessiblecost-shifting analysis is necessary Facts: P alleged D (employer) treated her differently than male co-wokers; P filed EEOC discrim charge and Title VII sex. discrim and retaliation claim; Ps #28 request was for all docs concerning any
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communication by or between UBS employees concerning P. D responded by producing approx 350 pages of docs including 100 pgs of emails. P objected saying there were additional emails that D failed to produced bc she produced 450 pgs. of email correspondence. D never searched for responsive emailson any of its backup tapes bc D said cost would be prohibitive ($300,000). D had extensive email backup and preservation protocols in 1) backup tapes and 2) optical disks Issues: 1. Is P entitled to discovery of relevant emails that had been deleted and resided only on backup disks? 2. Was consideration of cost-shifting of discovery costs proper? 3. What is the proper cost-shifting analysis? Holding: Yes, Yes, Seven Factor Test. Rule 34: party may request discovery of any document that is relevant to her claims. Document includes electronic docs. Cost-shifting does not need to be considered in every case involving discovery of e-data, BUT cost-shifting should be considered only when electronic discovery imposes an undue burden or expense on the responding party. Whether production of docs is unduly burdensome or expensive turns primarily on wheter it is kept in an accessible or inaccessible format. When inaccessible, should consider cost-shifting. Court uses a Seven-Factor Test (see below) Reasoning: 5 categories of data: o Active, online data (most accessible) o Near-line data (typically accessible) o Offline storage/archives (typically accessible) o Backup Tapes (typically inaccessible) o Erased, fragmented, or damaged files (least accessible) - Accessible v. Inaccessible: o Accessiblestored in a readily usable format. Takes time to actually access data, data does not need to be restored or otherwise manipulated o Inaccessiblenot readily usable; backup tapes must be restored - D maintained info in three forms: 1) active user email files, 2) archived email on optical disks, and 3) backup data stored on tapes o For 1 and 2, inappropriate to consider cost-shifting; for 3 (backup tapes), for which D would have to engage in costly and time consuming process to access, cost shifting should be considered - Seven-Factor Test (certain factors should dominate; not equal weight!...first two are most important) o Extent to which request is specifically tailored to discover relevant information o Availability of such information from other sources o Total cost of production, compared to amount in controversy o Total cost of production, compared to resources available to each party o Relative ability of each party to control costs and its incentive to do so o Importance of issues at stake in litigation o Relative benefits to the parties of obtaining the info
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Summary Judgment Rule 56

What is Summary Judgment? SJ provides an opportunity for either party to win a case prior to trial by demonstrating (56(e)) that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law SJ v. motion to dismiss SJ is the first real opportunity for identifying factually deficient claims or defenses. It assumes special importance in a notice pleading system Nature of the SJ Device : Concept of Burden Shifting (Mechanics of SJ) SJ establishes that party against whom the motion is made lacks sufficient evidence to meet his burden of proof (burden of persuasion or production) o Summary judgment deals with Burden of Production (duty upon a party in a legal proceeding to introduce enough evidence relating to an assertion of fact to have the issue be considered by the fact-finder rather than summarily dismissed or decided; part of the burden of proof.) Burden of persuasion: at trial, burden to show that your version is more likely than not Usually plaintiffs burden, but in an affirmative defense, its defendants burden To be able to get to the jury, the party with the burden of persuasion must present evidence sufficient to meet that burden (i.e. enough evidence that a reasonable finder of fact COULD find for him) Burden of Production: IMPORTANT FOR SJ. Is there enough evidence to go to trial? *Burden Shifting* - going beyond meeting the burden can shift it by presenting enough evidence so that a reasonable finder MUST find for him. BoP is shifted when party shows enough evidence that a reasonable fact finder must find for him. If party meets, but does not shift, it means that the fact finder can reasonably go either way no SJ. Relationship between SJ and Judgment as a Matter of Law (JMoL) o JMoL seeks to establish that the non-movant has failed to meet its burden of production, and that no reasonable jury can rule in favor of the non-moving party o SC said that standard of proof to be applied is same of SJ and JMoL o At trial, the party who does not have the burden of production, may, at the end of his opponents case, move for a JMoL. At this point, court will inquire whether enough evidence presented by the non-movant meets his burden of production. o allowed at two different times: D only after P has presented her evidence P and D After both parties have presented evidence and before closing statement FRCP 56(c): the judgment sought should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue of material fact and that the movant is entitled to a judgment as a matter of law Partial Summary Judgment: A summary judgment that is limited to certain issues in a case and that disposes of only a portion of the whole case
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Related to motion to dismiss in that it sorts out what issues will be dealt with o Purpose: Allows for speedy disposition of a controversy without the need for trial o When: Usually happens after discovery (vs. a motion to dismiss which is before the answer) Both claimant and defendant can move for this; often will see both parties move for this Burden of Proof: consists of burden of persuasion and burden of production o Burden of Persuasion: The party with this burden must convince the trier of fact at trial of the accuracy of the factual assertions If its 50/50 case, a person with burden of persuasion will lose bc not more than likely Usually P has burden of persuasion on all claims (except for affirmative defenses) o Burden of Production: The party with this burden has to present enough evidence that a reasonable trier of fact could find for him (question is: is there enough evidence to go to trial?) Can shift back and forth throughout trial Summary Judgment falls here: moving party for SJ has to produce evidence negating any essential element of nonmoving partys claim; court determines whether if the trial were stopped at this point, it would send case to jury; if not, the court decides case and jury has no rule to play
56(e) does not allow affidavits based on hearsay evidence - Youre asking if a reasonable jury could find for the non-moving party, so you shouldnt base this upon evidence that the jury couldnt hear. - This argument applies to depositions based on hearsay as well, because jury wouldnt be able to hear them. Rule 56 doesnt speak to this, but stuff (like that mentioned in part C) has to be admissible at trial to be considered at motion for SJ. Adverse party may serve opposing affidavits in response to summary judgment (56C) - Parties are putting on mini paper trial including what things they will present. 56(c) there is no genuine issue as to any material fact - Material facts are those that will affect the outcome of the case (stronger than relevant) - A dispute over those facts is genuine if a reasonable jury could resolve it either way -D can request at any time, but must be 10 days before day of hearing (for both P and D) -SJ before trial; Judgment as matter of law (directed verdict) during trial - SJ provides an additional filter past 12(b)(6) where P can state a valid claim but without real evidentiary support. So SJ protects against the harm of the burden of trial (expense, embarrassment, hurtful). -Purpose is to avoid irrational decision-making, and avoid delay and expense of trying unprovable cases -Also provide for resolution of another category of cases, which parties agree on underlying facts but disagree to legal implications of the facts Adickes v. Kress, SC US, 1970 - Absence of Dispute of Material Facts FACTS: Petitioner, Adickes, a white school teacher from NY, was with six black students in Hattiesburg MI in 1964. They went to Respondents store to get lunch and Adickes was refused service. When they left, she was arrested outside the restaurant by a policeman for vagrancy. She brought suit under 1983 alleging that she was refused service for
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being with colored people and that her denial of service and arrest were the product of a conspiracy between Kress and the police. District Court granted SJ for conspiracy charge, ruling that petitioner had failed to allege any facts from which a conspiracy might be inferred. This determination was unanimously affirmed by the Court of Appeals. Supreme Court reverses. ISSUE: Has D met his burden of showing an absence of dispute of material facts such that he should be granted summary judgment? RULE: No. D has not showed an absence of dispute of material facts. Petitioner alleged that the policeman was in the store while she was there and at that point reached some arrangement that she was not to be served, and that this was the policeman who arrested her. The respondent did not foreclose the possibility that there was a policeman there while she was awaiting service. Furthermore, neither police officer in his affidavit denied that he was in the store at the time or that he expressed disapproval to a Kress employee. If a policeman were present, we think it would be open to a jury, in light of the sequence that followed, to infer from the circumstances that the policeman and a Kress employee had an understanding that petitioner should be refused service. D needed to produce affidavits from officers denying they were in the store. Celotex Corp. v. Catrett - SC US 1986 Cited as Precedent for SJ FACTS P, Catrett, brought action alleging that her husbands death was caused by exposure to asbestos manufactured or distributed by D. D moved for SJ on ground that P failed to produce evidence that any Celotex product was proximate cause of the injuries. In response P produced three documents: a transcript of deposition of decedent, letter from decedents employer, and a letter from an insurance company. They all showed that decedent was exposed to Ds products. D claimed these were inadmissible as hearsay. District Court granted the motion. Court of Appeals reversed because petitioner did not produce any evidence, such as affidavits, to support its motion. Supreme Court reverses. ISSUE Does Rule 56 require that a party moving for summary judgment support its motion with evidence or other supporting documents? RULE No. There is no express or implied requirement to support this motion with affidavits or other materials. The language of 56(c) says affidavits, if any this suggests the absence of such a requirement. 56(a) and (b) say that parties may move for summary judgment with or without supporting affidavits. Moving party bears burden of demonstrating to the court the basis for its motion and identifying the portion of the pleadings, depositions, affidavits, etc. that shows the absence of a dispute of material fact. DISSENT (Brennan) The court did not fully explain what is required of the moving party. Also he disagrees with the application of facts to the following principles. The moving party has the burden of showing a nonexistence of a genuine issue. 1. If the moving party has the burden of persuasion on the challenged claim: a. It must support its motion with affirmative credible evidence 2. If non-moving party has burden of persuasion at trial, then moving party can: a. Submit affirmative evidence which negates non-moving partys claim b. Or, it can point out that nonmoving partys evidence is insufficient to support its claim by showing absence of evidence in the record Adverse party has 3 options in response to motion for SJ: 1. Say that moving party hasnt adequately supported its motion 2. Produce affirmative evidence 3. Ask for more time
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Court says we dont think that Addickes requires the non-moving party to show affirmative evidence. It is enough for non-moving party to show that there is dispute as to facts. Court says they are not overruling Addickes. Besides the wrinkle about what to do when non-moving party has inadmissible evidence, the rule after Celotex is clear. -If D wants to move for summary judgment, it has two options: 1. It can submit affirmative evidence that negates an element of Ps claim 2. Or D can point to the evidence in the record that shows that P has nothing Court limits its language to motions defense or parties who do not bear the burden of proof at trial. - Moving party who bears burden at trial must come forward with affirmative evidence. - If P is moving, it cant just say D has no evidence. - D can move for SJ without any supporting evidence Court does not look to credibility of witnesses/testimony in a motion for SJ Hypo Officer Rogers arrests Jones. Jones hangs from bars of cell. Jones (estate) sues town for not taking proper precautions. P needs to show that there was reason officers knew or should have known Jones would commit suicide. Town moved for SJ. Granted only if Town provides evidence that there were no signs of him being suicidal, cannot grant SJ if the moving partys evidence itself raises doubts as to the relevant facts, they need to provide evidence that proves them wrong.
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Choosing the Forum: Geographic Location

Personal Jurisdiction
When can the court summon a defendant from beyond a states borders? Litigants care because this imposes expenses, plaintiffs are supposed to have initial choice. -Power of a court over a person (in personam) or his property (in rem); there is also quasi in rem In personam jurisdiction: power of the court to enter a money judgment against the defendant personally liable. May be satisfied by seizing and liquidating the defendants assets. Pennoyer: Court can enter judgment in personam only when it is obtained through personal service of process o Transient: state can exercise jurisdiction over defendant when he is present in the state for a short time if he is served there o Constructive service: fiction that person got notice even though actual notice was not delivered In Rem Jurisdiction: power of the court with regard to property (usually real estate) within its borders. It is a direct proceeding against eh property for the purpose E.g. action to determine title to property? o Pure in rem: state sought to bind rights of entire world in a piece of property within state borders o Actions in the nature of rem: while state sought to bind rights in property, it only did so to specific individuals Quasi in Rem Jurisdiction: Action is purely personam as the substance of the case has nothing gto do with property. But because the state lacks personal jurisidiction, it takes the property. Claim for relief can be UNRELATED to property that provides the basis of jurisdiction. quasi in rem, and that is that instead of determining the rights to everyone who owns property, youre just dealing with A or B. Pennoyer v. Neff US SC 1877 - Traditional Formulation: Power Theory FACTS: Mitchell sued Neff in Oregon Cir. court. Neff was Cal resident, so serviced him through publications once/week for 6 weeks. Mitchell won default judgment which was Neffs land owned in Oregon. Mitchell eventually transferred title to Pennoyer. Oregon Fed court Neff sued Pennoyer over land saying Mitchells suit was invalid b/c Oregon did not have jurisdiction over him. ISSUE: Did Oregon court have jurisdiction over Neff? RULES: No, there was no jurisdiction in personam over Neff. - Territorial theory of jurisdiction - Every state possesses exclusive jurisdiction over persons or property within its territory - No state can exercise exclusive jurisdiction over persons or property outside its territory Judgments in personam without personal service of process shall not be upheld. - Judgments in rem with only constructive service may be upheld. - The Full Faith and Credit clause of the Constitution only applies when the court rendering the judgment had jurisdiction of the parties and of the subject-matter. NOTE: Even though lack of personal jurisdiction is a disfavored defense (cannot bring it up unless brought up in complaint), he can collaterally attack the default judgment on the basis of a lack of PJ in the initial action.
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***Publications okay for in rem or quasi in rem when the property owners are unknown and cant be found w/in reasonable means Traditional Bases for Jurisdiction: (Based on Pennoyer) Presence personally serving within boundaries of the state o includes transient (served on plane over state it counts as being in state) o Excludes fraudulent bring somebody in-state with promise of other thing to serve o Burnham still good way to get PJ Voluntary Appearance if you show up in court and not challenge personal jurisdiction, then you are subject to it o except (special appearances) saying that youre appearing only to contest personal jurisdiction o FRCP 12 can waive Consent including implied consent o Shaffer Domicile where you/corporation live(s) Minimum Contacts/General Jurisdiction o If you live in a state, you can be served there Attachment of Property in rem, quasi in rem o What exactly is property? o Shaffer all assertions of state-court jurisdiction must be evaluated according to the standards set forth in I-Shoe and its progeny Full Faith and Credit Statute acts, records, and judicial proceedings of the States shall have such faith and credit given to them in every court within the Unites States which they had by law in the State where rendered. 28 USC 1738 Meant not to preclude inquiry into jurisdiction. Fraudulent Inducement: limits the ability of plaintiff to invoke power of distant state through subterfuge Hess v. Pawloski US SC 1927 Expanding the Bases for Jurisdiction Implied Consent FACTS: P (Hess) sued D (PA resident) for injuries that occurred in MA. MA has an implied consent statute about driving in their state (provides jurisdiction in MA). Privilege to drive in their state, so you are subject to their jurisdiction. ISSUE: Does the MA law that implies consent of D to the appointment of Registrar as his agent valid jurisdictionally? YES RULE: States have right to protect their highways for both residents and non-residents so long as its not prejudice against non residents. Creates regime of implied consent to jurisdiction you imply your consent while driving. NOTES: Courts were trying to find to be consistent with Pennoyer, which didnt work practically, because territorial jurisdiction created problem in seeking redress for injury sustained by out-of-state people passing through. Defendant was given notice through registrar. Said jurisdiction is implied in consent, and a state has the right to regulate driving for citizens. International Shoe v. Washington US SC 1945 Shift to Minimum Contacts FACTS: State of Washington brings action to force Shoe (DE corp w/HQ in St. Louis) to pay unemployment tax. Shoe has no offices, inventory, or does not make any contracts for sale in Washington. They have 11-13 salesmen who operate out of their homes in Washington. They do have shoes in retail stores there. P served a salesman personally and mailed copy under registered mail to St. Louis.
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ISSUE: RULE: When is a corporation present in a state such that the state can exercise jurisdiction over it without violating due process clause of 14th amendment? Due process requires that if party is not present in the state, he have minimum contacts with the state such that traditional notions of fair play and justice are not offended.
Minimum Contacts Test for Jurisdiction Based on International Shoe - Volume of contacts (continuous and systematic) For Personal Jurisdiction, the level of activity must be continuous and systematic, For No Personal Jurisdiction, the level of activity must be a casual presence or isolated activities, - Relatedness of contacts For Personal Jurisdiction: Activity must give rise to liability For NO personal Jurisidction: Rleation of the claim to the activity must be unrelated - Inconvenience to Defendant - Did Defendant derive benefits and protection from state? - States interest in fair and orderly administration of laws General v. Specific Jurisdiction General Court can hear any claim about the party It doesnt have to be related to Ds contacts with the state Ds contacts are substantial or pervasive (volume is great) Specific Court only has jurisdiction over D for claims related to its contacts with the state This could arise from a single act, or continuous but limited contacts (volume) Minimum Contacts Guidelines for Applying Applies to individuals as well as corporations Long-arm statute limitations on PJ are distinct form the constitutional limit for minimum contacts Can have sufficient min contacts in a state even though they did not act w/in state Focuses on time when act was committed not time of suit (for min contacts)
Statutory Limits of Personal Jurisdiction: (Long-arm statutes and 14th Amend)
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-14th Amend limits on power of state to impose PJ over Ds in civil suits to: -Established significant relationship to forum state (domicile, in-state presence, continuous and substantial business w/in state, consent to suit in that state or min contacts) -States can still limit this beyond 14th amend to their liking, 14th is just a outer boundary -Process to determine Personal Jurisdiction: 1) Court must ask whether there is state statute that authorizes it to exercise PJ under circumstances (long arm statute) If yes, would it be constitutional under the due process clause (14th Amendment) to do so o Does exercise of PJ violate the Due Process Clause? o States can give LESS jurisdiction than minimum contacts would allow. Is there traditional bases under Pennoyer? 2) Minimum Contacts analysis? (Intl Shoe) 3) Purposefully Availed? (Hansen v. Denkla) 4) Forseeable that theyll be haled into court? 5) Fairness traditional notinons of fair play and justice Is claim related to contacts? CLOSER THE RELATEDNESS, EASIER TO SHOW PJ Is the claim in the interest of the forum state? Specific Jurisdiction and State Long-Arm Statutes: McGee v. International Life Ins. Co. US SC 1957 Substantiality (1 Contact ok) and Relatedness FACTS International Life assumed an insurance obligation of Franklin. McGee, CA resident, was the beneficiary, and D refused to make payments upon Franklins death. P brings suit in California, basing jurisdiction on long arm statute. D did not have any office in CA or any other business besides the Franklin legacy contract. CA court enters judgment for P. ISSUE Does Ds single contact with CA meet the minimum contacts rule of I-Shoe? RULE Even a single contact is enough for specific jurisdiction if it is substantial. Insured party and beneficiary were resident of the state, the premiums were mailed from CA. Justice Black wrote the opinion hes all about states interest, which he stressed here. Supreme court was acting broadly. Hanson v. Denckla US SC 1958 Purposeful Availment FACTS Donner, PA resident who later moved to FLA, leaves her will to 2 daughters and trust estate (set up in Delaware) to grandkids of other daughter. Daughters bring suit in Florida to get trust money, alleging that trust is ineffective. Daughters win there. Grandkids bring suit in DEL and win there. Trust and trustee were in Del. Trustee had no office, no contracts, and conducted no business in Florida. ISSUE Can Florida exercise jurisdiction over the trustee? RULE The bank did not purposefully avail itself to conducting business within the state. Contacts need to be related and purposeful. Purposeful availment requires that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the form state, thus invoking the benefits and protections of its law. Unilateral behavior is not enough for plaintiff to bring defendant into court. Purposeful Availment D must have made a deliberate choice to relate to state in some meaningful way before she can be made to bear the burden of defending there (example advertisement or buying house). It is essential that there is an act where the D purposefully avails himself
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on the privilege of conducting activities within the forum state, thus invoking benefits and protections. Gray v. American Radiator - Note Case - Example of Long-Arm Statute - FORESEEABLITY FACTS P injured by explosion of water heater in Ill. Sues in Ill state court. Manufacturer of heater (PA) and valve (OH) are not residents of Ill. ISSUE Is there personal jurisdiction? RULE Yes, Ill long-arm statutes control this because tortious act occurred in Ill. Constitutional Due Process requirements fulfilled b/c Titan put component part into stream of commerce with the exception that it would be marketed in Ill. Stream of commerce test is the same as minimum contacts test: When someone either puts a fully made good a component of its in the stream of commerce, there is minimum contacts. There is foresseability. Stream of Commerce: justification for exercising jurisdiction if a commercial actor puts its products into the stream of commerce with the expectation that theyll be marketed in the forum, it may be sued in the forum for injuries allegedly resulting there Same standards in stream of commerce and minimum contacts Personal Jurisdiction in Federal Court Rule 4(k) Rule 4(1)(K)authorizes exercise of personal jurisdiction by a federal court only to the extent a state court under long arm statute could exercise jurisdiction Problems of statutory interpretation and due process are the same whether the case is in federal or state court o Exception: 4(1)(C) Congress has authorized in some cases a nationwide service of process in specific statutes Nationwide service is designed to provide a forum in federal court that can bind all interested parties where jurisdictional problems might make that impossible in state court o Exception: Rule 4(k)(1)(B) authorizes service within 100 miles of federal courthouse, even though outside the state Bulge Jurisdiction: to allow complicated controversies to be ended by a single lawsuit if all the necessary third parties can be found within 100 miles of courthouse o Rule 4(k)(2) invoked special jurisdiction features regarding federal claims when the defendant is not subject to jurisdiction in any states courts of general jurisdiction A plaintiff can show that jurisdiction is not possible in any state by not naming any states, and refusing to identify another state where suit is possible Pendent Personal Jurisdiction: exists when a court possesses personal jurisdiction over a defendant for one claim, lacks an independent basis for personal jurisdiction over the defendant for another claim that arises out of the same matter, and because it has jurisdiction over one, it has it over the other too o Found where one or more federal claims for which there is nationwide personal jurisdiction are combined in the same suit with one or more state or federal claims for there is not nationwide personal jurisdiction. WWVW v. Woodson US SC 1980 Stream of Commerce not enough Purposeful necessary! FACTS Robinsons were residents of NY and purchased their Audi from Seaway in NY. Passing through OK, they get rear-ended and car catches fire. They bring liability case in OK. WWVW is based in NY and distributes cars, parts, etc. to NY, NJ, CT. Seaway inc. in NY. Neither D transacts business there, advertises there, or has agent there.
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ISSUE Can a state exercise PJ over D whose only connection is a product that ends up there and is involved in a controversy? RULE There is no jurisdiction since there was no purposeful availment. PRODUCT ENTERING STATE THROUGH STREAM OF COMMERCE IS NOT ENOUGH TO SATISFY MINIMUM CONTACTS. THE CONTACTS MUST BE PURPOSEFUL. Foreseeability (car as transport should be foreseen to be in all states) alone is not sufficient for jurisdiction under Due Process. Its not foreseeability of car getting there is not enough, its foreseeability of being sued there is enough. DISSENT (Brennan) We should care about states interest more. Also, product entering the state through stream of commerce should be enough. Asahi v. Superior Court (1987) Stream of Commerce +, chain of dist., reasonableness FACTS Asahi (Japan) manufactured components that wound up in tires in US. It sold the valves to Cheng Shin in Taiwan, who manufactured the tube that was alleged defective by Zurcher in products liability action in CA. Cheng Shin cross-complained seeking indemnification from Asahi. All complaints were settled and dismissed except for Cheng Shins indemnity claim against Asahi. Asahi has no business, agents, or office in CA. Asahis only contacts with CA are through Cheng Shins sales, which it apparently knew of. ISSUE Is foreign Ds awareness that its products would enter the state through stream of commerce sufficient to establish minimum contacts? RULE Reasonableness (Unanimous) Plurality Opinion Jurisdiction over Asahi is unreasonable because the burden on D (Japanese firm) weighed against the states and Ps interests is too great. Going from Japan to CA, as well as settling dispute with Cheng Shin under foreign judicial system is a significant burden. CAs interest is questionable in settling an indemnification dispute between a Japanese and Taiwanese firm. We also need to be sensitive to international context. The standard is of reasonableness, and it is not established minimum contacts in this case. Purposeful Availment (OConnor + 3) Being aware that product will enter through stream of commerce is not enough (foreseeability) to constitute purposeful availment. You need additional conduct. Substantial connection must come Ds purposefully directed actions towards state (ads, offices, agents, etc.). Stream of Commerce + Test (of evidence that D seeks to serve the market in the particular state) DISSENT: Brennan: Stream of commerce is enough. Its a predictable flow of products, so D shouldnt be surprised, and it gets benefits from it. Any foreseeable delivery is purposeful availment. SAME AS GRAY Steven: purposeful availment is determined by volume, value, and hazardous character of products Other Factors to Think about for PJ: (a lot of fairness issues) for close cases fair play and substantial justice -Interests of forum state other than Ds in providing redress to its citizens -Interest of P in obtaining relief in convenient forum -Interest of states in enforcing their substantive law or policy -Extent of inconvenience to the D if she is forced to defend away from home Whats Left from Pennoyer? Shaffer v. Heitner US SC 1977 Minimum Contacts for in rem Jurisdiction over Property FACTS P moved to sequester Delaware property of D, Del. Corp. Stocks were subject to seizure b/c of DE Corporation per DE statute. All 28 Ds were notified through certified mail. 21 (those
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whose properties were seized) entered special appearance for the purpose of moving to quash service of process and to vacate the sequestration order. ISSUE Should the standard of fair play and substantial justice (minimum contacts standard of I-Shoe) govern jurisdiction in rem as well as in personam? RULE In order for a state to assert personal jurisdiction, due process requires minimum contacts OVER AND ABOVE the mere ownership of stocks in a corporation incorporated in that state. Jurisdiction over property is still an exercise of jurisdiction over the owner, so we should use the same standard. Sequestering the property was done only to compel party into court. Need to look at minimum contacts and all that to determine jurisdiction over the person. Minimum contacts from Intl Shoe applies to quasi in rem property. Quasi in Rem and personal jurisdiction are one and the same that personal jurisdiction is based on property ownership contract and by that definition, unaccompanied personal in state service must satisfy the minimum contacts requirement in situations where D was not present in the forum. Types of in rem jurisdiction 1. True in rem jurisdiction a. About the actual property 2. Quasi in rem a. Type 1: Case is about a property but against a particular person or persons b. Type 2: is like that in Pennoyer: jurisdiction over property but property isnt related to the claim at all. c. Must attach at outset Pennoyer d. Shaffer must also be sure that D meets I-Shoe b/c land already satisfies I-Shoe (need both property and person to fit I-Shoe) Burnham v. Superior Court SC of US 1990 In-State Jurisdiction - Physical Presence FACTS Burnhams decide to separate and the wife moves to CA and husband stays in NJ. While Mr. Burnham was in California visiting the kids, he was served with process of the divorce petition she had filed in California earlier. He made a special appearance in Superior Court, moving to quash service of process on the grounds that California did not have jurisdiction over him, as his contacts with the state were not sufficient. ISSUE Does personal service of process in state satisfy Due Process for PJ? RULE In-state (transient) jurisdiction does not require that there be a connection between the claim and the Ds contacts with the state, nor does it need to meet the requirements set forth in International Shoe. Once having acquired jurisdiction over a person by properly serving process, the state can retain such jurisdiction. When a person is absent from a state, that standard is judged under Intl Shoe. But when the person is present in the state, then its personal jurisdiction. Scalia It is a well-established principle that states have personal jurisdiction over nonresidents who are physically present in the state. Brennan Pedigree is not enough we need an inquiry into the fairness of the rule. Applying the IShoe test we see that PJ comports with due process. Would be asymmetry w/out transient jurisdiction as a P transient would have benefit of courts and as D he would have immunity. Consent to Suit in Forum Entering a general appearance constitutes consent to proceedings in the jurisdiction selected by the plaintiff. The defendant may consent to jurisdiction in advance of the suit.
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Forum Selection Clauses

If youre a corporation, and you want to limit where youre being sued, you can put this in to avoid later dispute Another aspect of consent, where advance choice of forum is selected for any possible disputes FSC can trump otherwise valid jurisdiction Can limit your venue (where you can be sued) by doing this
Carnival Cruise Lines v. Shute SC US 1991 Forum Selection Clauses FACTS P (Shute) injured on cuise off coast of Mexico. Bought ticket in Washington. Ticket said any suits will be disputed in Florida. Filed suit in Washington fed DC. Dismissed for not having jurisdiction (no minimum contacts). CoA reversed and grants jurisdiction (citing The Breman). US SC reverses no jurisdiction. ISSUE Did CoA err in granting jurisdiction and rendering forum clause unenforceable? RULE If there was inconvenience on one of the parties then would not be valid, burden to prove inconvenience is on P. A freely negotiated forum-selection clause, such as the one there at issue, should be given full effect, and are subject to judicial scrutiny for fundamental fairness. Reasons why its okay: saves time and money of litigations which eventually gets passed to customer through cheaper tickets and there is no indication that Florida holds any benefit to Ds. Forum selection clause is constitutional. Stevens (Dissent) Wont give back tickets b/c already bought them and most dont read fine print. Unequal bargaining power. Forum-selection limits carriers liability or weakens passengers right to recover. Weakens winability for P b/c easier to make case in home forum. Specific Jurisdiction Synthesis Are there traditional Bases (3 from Pennoyer) Step 1: Is there a Long-Arm Statute? Step 2: If So, Is it Constitutional? Due Process (Constitutional Analysis) (Does it offend traditional notions of pfair play and justice? Step 3: Are there Minimum Contacts I-Shoe Step 4: Did they purposefully avail themselves? (Hanson no purposeful availment) 1. Purposefully entered the state and done something there (I-Shoe) 2. Sold product there/ stream of commerce (WWVW, asahi) a. Product entering state thru stream of commerce not enough Step 5: Is it foreseeable that they will be haled into court? Foreseeability that product will enter stream of commerce is not enough (Asahi). OConnor: Stream of Commerce Plus b. Brennan thinks it is enough in his dissent 3. What is the level of activity? 4. Does the activity give rise to liability? 5. Contract in state McGee 6. D causes effects in the state Calder didnt do that in case a. Calder had targeted effects ii. Relatedness does the cause of action arise out of or relate to Ds conduct? 1. Varied Tests a. But For -This accidenet would not have happened but for X doing Y. b. Substantial Connection: Are Ps claim and Ds contacts connected in some meaningful way
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state to prove his elements? The contact directly caused the action
2. If Yes There is Specific Jurisdiction 3. If No, there is Continuous, systematic, substantial general jurisdiction, so
You lose iii. Foreseeable for D to be sued there b. Reasonableness I-Shoe and WWVW i. Burden on Defendant, Plaintiffs interest, States interest ii. Interstate judicial efficiency (the forum is a convenient, efficient place w/ regard to witnesses, evidence, etc.) iii. Shared interests and fundamental values (policy) Address minimum contacts first. If thats a maybe, then go to reasonableness.
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Notice Rule 4
-Rule 4(k) Territorial Limits of Effective Service - PJ over D who is served under Rule 4 and who is: - Follows whatever the state where the Fed Court resides would do; if the state long arm statute authorizes jurisdiction wrt circumstances of case and constitutional under 14th Amend analysis (rule makes you look under 14th amendment, not constitution const would leave a broader reach of PJ) -Joined under Rule 14 or 19 and not outside 100 miles of where summons was issued -When federal statute says -Claim under federal law summons works if: -D is not subject to any state courts general jurisdiction -Exercising jurisdiction is w/in US Constitution and laws -Basic rule for federal courts is that they have jurisdiction to the extent that the state that its in. 100 Mile Bulge Rule (Rule 4k1b) - Mostly relevant for metropolitan areas does not work for original D, only works for joinder parties under Rule 14 and 19 Interpleader Statute (4k1c) - Deals with people that have same claim to the same thing. - Allows fed court to assert juris in interpleader cases w/out regard to limits on SC juris 4k1d: US Statute trumps the general rule - Such as Securities and Exchange Act. -Rule 4(e) Service on individuals: -Can go out of state when that state court can do so wrt that fact pattern -4(e)(1) methods allowed in state where DC resides and statewhere service is made -Rule 4(h) Service of Corporations (1) made to officer, managing or general agent of D (inside US) or by law of state (see above); (2) applies to outside US service to corporations
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Venue
Venue means place of trial. This places a further geographical limitation on Plaintiffs options in selecting a forum Once you have PJ, which court do you sue in? (eastern or Wester district?) Were thinking about CONVENIENCE for defendant Due to relaxation of restrictions on jurisdictional, federal venue requirements now place an additional hurdle on the plaintiffs way Now, the purpose of statutorily specified venue is to protect the D against the risk that P will select an unfair or inconvenient place of trial. D can make the scope of their business narrower to avoid being sued (ex. Tri-state VW instead of WWVW) 28 USC 1391 Venue Generally. o A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in 1. A judicial district where D resides 2. A judicial district where events arose, or property is situated there 3. Catch all look at this only if the first two dont apply. A judicial district where D is subject to personal jurisdiction, if there is no district in which action may otherwise be brought o (b) Where jurisdiction is not founded only on diversity of citizenship, case can be brought 1. Where D resides, or 2. Where substantial part of events occurred, or 3. In a district where D can be found, if there is no other district where action may otherwise be brought 4. (C) For purpose of venue, a corporation is deemed to reside in any district where it is subject to personal jurisdiction at the time action is commenced If all Ds are from same state, then have venue where all Ds are from (districts); otherwise they dont have it there 1391 does not apply when D has removed to federal court. It only applies where P has brought in federal court in the first place 1392 In rem Different districts in same stateVenue is vested in which property involved in the case is located. * TO ANSWER A VENUE QUESTION, WORK THROUGH 1391 and 1392* Bates v. C & S Adjusters - venue FACTS Bates incurred the debt while he was resident of WD of PA. C & S is a local collection agency, which transacts no regular business in NY. Bates had moved to WD NY. D mailed a collection notice to Ps PA address, and it was forwarded to his new address in NY. P brought action under the Fair Debt Collection Practices Act. RULE Supreme Court ruled that a mailing by a collection agency to a debtor, which was forwarded to another district where the debtor subsequently moved to, is sufficient to establish venue in that other district under 28 USC 1391(b)(2) substantial amount of actions that gave rise to the claim occurred there. The requirement for venue is looser than that for PJ. Substantial events occurred. ***ON Exam: go through statute to figure out where case can be brought. 1391 and 1392
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Forum Non Conveniens judicial doctrine saying case should be heard in another
judicial system Difference from Transfer of venue about geography Discretionary even if proper jurisdiction and venue requirements are met, court can still dismiss
the claim - The result is not a transfer to a different court, but a dismissal of the action, and P would have to bring the action again. Court too inconvenient this is what is used when you cant use transfer venue Differs from transfer of venue in that transfer is appropriate when practical factors suggest another more convenient forum and that forum is w/in the same judicial system
Piper Aircraft Co. v. Reyno Forum Non-Conveniens FACTS A plane manufactured by Piper in PA, crashed in the Scottish Highlands. The pilot and 5 passengers were killed. The decedents and their heirs were all Scottish. The propeller was manufactured in Ohio by Hartzell. The aircraft was registered in GB and was owned and maintained by Air Navigation (a GB company). It was operated by McDonald Aviation, a Scottish air taxi service. accident was due to pilot error. HISTORY Reyno, administatrix appointed by CA probate court, brought wrongful death actions against Piper and Hartzell in Superior Court of CA, claiming negligence and strict liability. Survivors filed a separate action in UK against Air Navigation, McDonald, and pilots estate. CAs FNC rules are more stringent than federal court. Petitioners motion removed the case to District Court for CD CA. Piper then moved for transfer to MD PA under 1404(a). Hartzell moved to dismiss for lack of personal jurisdiction, or in the alternative, transfer. District Court quashed service against Hartzell and moved the case to MD PA. Hartzell was then properly served. After transfer to MD PA, both Ds moved to dismiss on forum non conveniens. Motions were granted in October 1979. Court relied on balancing test of Gilbert. It noted that courts arent as generous when foreign citizens bring action in US for more liberal laws. Change in Substantive Law Possibility of change in substantive law should ordinarily not be given conclusive or even substantive weight in the FNC. If remedy provided in alternative forum is so clearly inadequate or there is no remedy at all, the unfavorable change in law may be given substantial weight.
RULE
General Analysis of Piper The assumption is that California has personal jurisdiction over Piper but not Hartzell. Why? - Stream of commerce contacts. Selling stuff in the state is enough as long as the D meant to sell them there or directed the products there (Asahi). Why not Hartzell? - Just like Asahi, Hartzell only manufactured components. There was no purposeful availment. - Piper is the one in control; it know their product is going to California. Hartzell sells its product to Piper.
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Notice Requirement
Mullane Standard: notice should be reasonably calculated under all the circumstances to apprise interested parties of the pendency of the action and affrod them an opportunity to present objections Dusenbery: Constitutional standard is NOT that person personally gets the notice. Actual notice is that he gets served, and the procedure that make it seem likely he got served are all that were looking for
Jones v. Flowers standard for sufficient notice FACTS Commissioner then mailed a certified letter to his house in April 2000 warning him that he need to take certain steps to redeem his property or it would be subject to public sale in two years. The un-opened letter was then returned to the Commissioner marked unclaimed. After Flowers submitted purchase offer on the house under public sale, Commissioner then mailed another certified letter to Jones attempting to inform him that if he did not pay his back taxes, the house would be sold. This letter was returned marked unclaimed. Jones claims notice was not proper. ISSUE Is certified mail, which complies with statute and is normally constitutionally sufficient, an adequate form of notice when the sender knows that it has failed to reach the recipient? RULE Knowing that certified mail failed, it could not be reasonably calculated to reach him. It should have taken additional steps, such as sending regular mail, so the tenant would have opened it, or it would have stayed in the mailbox so Mr. Jones could have plausibly seen it later.
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Subject Matter Jurisdiction

Original Federal Court Jurisdiction States get their power from 10th amendment of the US Constitution powers not delegated by the US Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to their people SMJ can be brought up AT ANY POINT in a trial Sometimes restrict the court cases going into them b/c of specialization state courts are better in certain areas than fed courts (they are limited in their scope of expertise). Court might have PJ over the parties but still might not be able to hear the case. Personal jurisdiction (and notice) is an individual right. (They can waive it or charge a violation) Subject matter jurisdiction is not a right but a structural limitation on the power of the court. Court is under obligation to note that it cant try the case if it doesnt have SMJ -Horizontal Federalism - Personal Jurisdiction is like this; its jurisdiction between states. -Vertical Jurisdiction - This is SMJ; will this matter be adjudicated in state or federal court US Constitution, Article III permissive powers, not absolutely necessary Section 1 Creation of Supreme Court and inferior courts created by Congress Section 2 How far judicial power extends; arising under Constitution, laws of US,& treaties made -All cases affecting foreign public figures; admiralty; where US is party; controversies b/w two or more states; b/w state and citizens of another state; citizens of different states; b/w citizens of same state and land in another state; b/w states and foreign nationals -Means either a FEDERAL QUESTION (arising under) or DIVERSITY JURISDICTION (diversity) Can a state court hear a federal issue? a. Unless there is exclusive state jurisdiction or outside the powers of federal jurisdictions, a state court can hear federal matters. i. State courts derive power form 10th amendment b. If it is not in Article III, Section II, the federal court does NOT Have jurisdiction
Why do we want federal courts what are the advantages? - Remedies regional bias o Jury pool in federal cases is larger o Insulated judges (life tenure, appointed and not elected) - National cases -People from different states. - Federal Law o Federal courts should decide federal law o Uniform: state courts decide state courts, so federal courts decide federal law
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TOO SEE IF THERE IS SUBJECT MATTER JURISDICTION IN FEDERAL COURT, LOOK AT: Federal Question Jurisdiction Arising Under o Article III o 28 USC 1331 Diversity Jurisdiction o Article III o 28 USC 1332
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Federal Question
Article III 2 Judicial power extends to all cases arising under the Constitution, laws of US, and treaties made. arising under deals with: o Article III o 28 USC 1331 Constitutional Test arising under Article III Osborn v. Bank of the US federal ingredient Justice Marshall takes a broad view of arising under, holding that if a federal law forms an ingredient in the case that is enough to satisfy federal question jurisdiction. Theoretically under this broad view, a case brought under state law but where a federal statute is used in defense would be allowed in federal court. 28 USC 1331 Subject Matter Jurisdiction; arising under District courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States Statutory Test arising under Narrow view (Mottley) gives us the well-pleaded complaint rule and limits the federal ingredient standard Louisville & Nashville RR v Mottley US SC 1908 Well-Pleaded Complaint Rule FACTS Mottleys were injured by RR and received a lifetime free pass on RR. When it was time to re-up the pass, RR declined citing federal statute saying that free rides are not allowed. Mottleys sued in federal court for specific performance to keep their pass. Brought into fed court b/c Ps said it would violate 5th amendment. DC granted SP for Ps and RR appealed to SC. ISSUE Can suit be brought in federal court in anticipation of defense being federal question? RULE For federal question jurisdiction to be invoked, Ps well-pleaded complaint must arise under federal law or Constitution. It is not enough to allege an anticipated defense as being a question of federal law or Constitutional violation. If a federal law or constitutional issue is not brought up in a complaint bringing a state cause of action, there is no federal subject matter jurisdiction. Remanded back to DC and told to dismiss per no SMJ. NOTESCourt aid that theyre only going to look the complaint. THE cause of action is a state cause, so thats not going into federal court. The court narrows its view of arising under in 1331 in reaction to broadness of Art. 3 Well-pleaded complaint rule: Does the essential federal element appear on the face of the Plaintiffss well-pleaded complaint, in other words is the federal element essential to the complaint? If so, federal question jurisdiction is appropriate. Must ignore counterclaims and focus on complaint only. If the complaint can be made without the federal element there is no federal SMJ. Why do this? Courts want to establish their jurisdiction from the outset, saves time and resources. Also, could lead to fraudulent complaints just to add federal defenses just to get case in federal court.
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NOT VALID IS FEDERAL ELEMENT IS IN DEFENSES ANSWER! MUST BE ON THE FACE OF THE COMPAINT ONLY! Mottley - Simply a federal ingredient is not enough, there has to be a well pleaded complaint, not just a federal question.
American National Red Cross v S.G. Suits against federal chartered corp are under federal jur. Shelly Oil v. Philips Petroleum C. - Under Declaratory Judgment Act: [T]here is federal question jurisdiction only when the declaratory judgment defendants coercive action would itself be within federal jurisdiction. Merrell Dow Pharmaceutical v Thompson SC US 1986 Statute Doesnt Create Fed Question FACTS P brings suit for damages caused by Bendectin, manufactured by D. P asserts state tort law theories of negligence, strict liability, etc. One negligence theory was that D did not meet labeling requirements under Federal Drug and Cosmetic Act (FDCA). The complaint alleged a state cause of action (negligence) but alleged that P could prove this cause of action by showing a violation of standards in federal statute. However, it was agreed that the statute did not create an implied private federal cause of action for its violation. So allowing a cause of action was against legislative intent. P sued in OH state court, D filed for removal to fed DC based on federal question (granted). Ps motion to remand back to state court was denied and claim was dismissed on forum non conveniens. CoA (6th Cir) reversed and SC affirms. ISSUE Where a state law creates a claim and there is an issue of federal law in the claim, but the federal statute does not create a private right of action, is there federal question jurisdiction? RULE A statute that creates a federal substantive right, but does not create a private cause of action, will not support arising-under jurisdiction under 1331. DISSENT Legislative intent: Congress gave FDA weapons to combat violations of FDCA. However, final enforcement comes from the federal courts, which have exclusive jurisdiction over actions under the FDCA. Brennan NOTE This case satisfies the well-pleaded complaint rule, but court finds that Congress did not intend such a private cause of action. Court is interpreting 1331 so it cares about what Congress wanted to have happen. There are two standards of federal question jurisdiction: constitution and 1331. Why does the court choose to use 1331? Because constitution is the outer boundary of the jurisdictional limits. Grable and Sons US Supreme Court 2005 Federal Question removed to federal Court FACTS Federal Tax matter was filed in state court. It was a state law cause of action and a private title issue. ISSUE Did a case involving the interpretation of federal tax law belong in federal court and not the state court where it was filed? Yes RULE There was no private right of action, you can not sue IRS. Court held that the case involved a federal question and could thus be removed to federal court. Federal-questions jurisdiction, the Court reasoned, lay over some state-law claims that implicated significant federal issues. In this case, the national interest in providing a federal forum for federal tax litigation warranted moving the case to federal court. There are several Rules. Never federal-question jurisdiction where state-created cause of action o Justice Holmess rule.
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There is always federal-question jurisdiction where state-created cause of action, but federal issue is a necessary ingredient o Merrell Dow here the court said there is no federal court jurisdiction Sometimes FQJ where state-created cause of action, btu federal issue is a necessary ingredient
State-Federal Balance How significant is the issue? How likely is the docket impact? Is it going to flood the courts? o One concern in Merrell was that many state statutes says that if you violate federal law, you can sue there. This would open up the state law to many state actions Implication of Congresss failure to create a federal right of action But no single, precise, all embracing test of jurisdiction over federal issues embedded in state-law claims.
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Diversity of Citizenship
28 USC 1332 diversity jurisdiction DONT TALK ABOUT WELL PLEADED COMPLAINT! THAT is only for FEDERAL QUESTION! NEED DIVERSITY AND AMOUNT IN CONTRAVERSY (a) District courts have jurisdiction over all civil actions where the amount in controversy exceeds $75K and is between 1. Citizens of different states 2. Citizen and foreigner 3. Citizens and foreigner is additional party 4. Foreign state as P and citizen (c) A corporation is a citizen of state of incorporation and principal place of business for purposes of diversity and removal *If party is added for the purpose of creating basis for diversity jurisdiction, they may be ignored for diversity purposes. Strawbridge v Curtiss US SC 1806 Multiple Ds and Ps Complete Diversity Requirement FACT Ps were all from MA, all Ds except one were from MA. That one was from VT. Ps tried to sue in federal court. ISSUE Is there diversity jurisdiction? RULE If there be two or more joint plaintiffs, and two or more joint defendants, each of the plaintiffs must be capable of suing each of the defendants in the courts of the United States, in order to support the jurisdiction. Requires complete diversity, interpreting 1332. Article III 2 allows diversity jurisdiction as long as some opposing parties to the action are diverse. The problem is 1332 requires complete diversity meaning every D must be able to sue each P in federal court. Complete Diversity: Texas (p) v. Mississippi(d) and Cali (d) (All parties are diverse) Minimal Diversity: Texas (p) v. Texas (d) and Cali (d) (not all Ps and Ds are diverse) Mas v Perry US CoA 1974 Diversity Jurisdiction and Citizenship FACTS Mr. Mas is citizen of France, Mrs. Mas has a permanent residence in Mississippi and D is citizen of Louisiana (LA). D sued in fed DC and won $5K for Mr and $15K for Mrs by jury trial. P asked for dismissal on lack of jurisdiction. Denied. Appealed on same grounds, apelles failed to prove diversityand requisite jurisdictional amount is lacking wrt Mr. CoA affirmed. ISSUE Is there diversity of jurisdiction b/c Mr and Mrs Mas live in LA at the time? Is the amount reasonable enough under initial claim to be in fed court under 1332? RULING Yes to both. No party on one side may be a citizen of the same State as any party on the other side for complete diversity. Citizenship means domicile; mere residence in that State is not sufficient. To be citizen of state need to be citizen of country, which Mr is not. For Mrs, even though she lived in LA, her main residence is MI. She was a student so she lacked the requisite intention to remain there and thus did not effect a change of domicile. Recovery doesnt matter as long as the requested amount is in good faith (at time the requisite amount was only $10K).
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28 USC 1332(c)(1) Domicile is established by residence and intent to stay. - Diversity J rests upon domicile when action is commenced only have 1 at time and have to have 1 Corporate Citizens - citizen of state of incorporation and principal place of business for purposes of diversity and removal. Tests for Corporate Citizenship: - Different Jurisdictions apply different tests Nerve Center Test state in which corporation performs its executive and administrative functions, where it is domiciled, management meets, and where the decisions are made Place of Operations Test state where corporate activity is significantly greater than any other state Unincorporated Associations - Look to the citizenship of each member
Amount in Controversy must be >$75,000K It must appear to legal certainty that the claim is really for less than the jurisdictional amount to
justify dismissal. St. Paul Mercury Indemnity Co. 303 US 283 1938 1332 says must be atleast $75,000 amount is permissive, as long as it was pleaded in good faith, you dont lose jurisdiction retroactively Has to be a legal certainty that the claim must be less than that amount for dismissal
Friend v. Hertz What is principle place of business? RULE In determining principal place of business for diversity jurisdiction, a court can disregard the location of headquarters (the nerve center) Hypo Corporate Citizenship P (PA) v. US Steel (NJ). Can P sue in Federal Court? New York Board, exec community, financial committee regularly meet in NYC, although occasionally in Pittsburg. Chairman of the board is in pittsburg once a day. GC, Sec, Treasurer have offices in NYC, Annual reports and income taxes filed in NYC. Pittsburg Operation Policy Committee is in Pittsburg, 34% of management staff is in Pittsburg, 32% of employee in Pittsburg, 1/3 of tangible property and 35% of productive capacity. You cant assume that the nerve-center test is going to apply. How do you know which test to apply? You should look at where the operations are conducted and where the principle place of business is and you find that out by looking at which test your jurisdiction has adopted. If youre not sure, you can submit answers under both.
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Supplemental Jurisdiction
Statute for supplemental jurisdiction: 28 U.S.C. 1367 (a) Fed courts jurisdiction over claims that arise out of same case or controversy that arise out of a claim that has original jurisdiction in fed courts under Article III of Constitution (Gibbs) i. if a district court has original jurisdiction over one claim, it will have supplemental jurisdiction over all other claims relating to that (b) If diversity jurisdiction is reason for original claim is in Fed Court in the first place, then same as (a) under 1332 except a. Claims by P against Ds under Rules 14, 19, 20, 24 (must be Ds) b. Joined as Ps under 19 or 24 (must be Ps) c. gives exceptions for actions that are founded only on section 1332 (diversity) (so it doesnt apply in this case) (c) Reasons to decline under (a) complex state issues, state claim predominates over others, etc. (d) Period of limitations 30 days Doctrines of Pendent and Ancillary Jurisdiction Pendent Jurisdiction stuff P can do; includes both claims under federal law, but also other claims based on state law that arise from the same set of circumstances Pendent Claim can we attach a second claim against the same party? Pendent Party adding a claim against a new party Ancillary jurisdiction everything that everyone else can do in response to what P did; permits parties other than the original plaintiff to assert related state-law claims against non-diverse opponents, including counterclaims against the plaintiff, such as third parties Cases that caused 1367 and led to Exxon United Mine Workers v. Gibbs (1966) common nucleus of operative fact Pendant Juris FACTS P brought suit in US District Court for ED of Tennessee, and jurisdiction was premised under alleged secondary boycotts under 303 of Labor Management Relations Act. The state law claim was based allegation of unlawful conspiracy aimed at Gibbs to interfere with his contract of employment. The jurisdiction for the state claim was based on pendent jurisdiction. ISSUE Did district court properly exercise jurisdiction? RULE Pendent jurisdiction exists whenever there is a claim arising under the Constitution, laws of US, and treaties made under their authority, and the relationship between that claim and the state claim permits the conclusion that the entire action before the court comprises but one constitutional case. The state and federal claims must derive from a common nucleus of operative fact. Pendent jurisdiction is a doctrine of jurisdiction with consideration of judicial economy, convenience and fairness to litigants. Gibbs Test squint test 1. Is there federal anchor claim? 2. Is there independent basis for federal jurisdiction for the other claim? 3. Do the claims arise from a common nucleus of operative facts such as to give supplemental J? Why is supplemental jurisdiction allowed? - Judicial economy, and convenience and fairness to litigants - Adding a state claim does not invalidate the reasons why we want federal courts to here a federal Q claim.
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Owen Equipment v. Kroger (1978) FACTS Krogers husband was electrocuted when the steel crane he was next to came too close to an electric power line. P brought wrongful death action in District Court of Nebraska against OPPD, based on diversity jurisdiction. OPPD filed a 3rd party complaint pursuant to FRCP 14a against Owen, alleging that Owens negligence had been the proximate cause of Krogers death. OPPD moved for summary judgment which was granted, and Owen was left as defendant. Respondents amended complaint alleged Owen was a Nebraska corporation. It later came out that its principal place of business was Iowa. ISSUE In an action in which federal jurisdiction is based on diversity, may the plaintiff assert a claim against a 3rd party defendant when there is no diversity between P and 3rd party? RULE 28 USC 1332(a)(1) requires complete diversity between parties to invoke diversity jurisdiction. Allowing this requirement to be circumvented would flout congressional command. And considerations of judicial economy or convenience to parties are not strong enough here for that. The respondent could not have originally brought the claim against Owen in federal court, so she should not be able to do so when the identical suit arises by way of summary judgment and third party complaint. NOTE The federal anchor claim here was diversity jurisdiction. UMW was fed Q Posture: court feels differently about what the P does and ancillary jurisdiction stuff. - This is not like a D who has been haled into court against its will, where we let them bring whatever they want. Here, a P chose federal court, so we cant let them add whatever they want. Finley v. United States (1989) Congress changed the statute FACTS P brought tort action in state court claiming that San Diego Gas & Electrics negligent positioning and illumination of power lines, and city of SDs negligent maintenance of runway lights caused the accident. She later found out that FAA was responsible for runway lights she filed action against the US in District Court. Complaint based jurisdiction on FTCA. A year later she moved to amend the complaint to include claims against the original statecourt defendants. District Court granted motion, asserting pendent jurisdiction under Gibbs. It said that judicial economy and efficiency favored trying the actions together, and that they arose from a common nucleus of operative facts. FTCA: district courts shall have exclusive jurisdiction of civil actions of claims against the United States. Supreme Court reverses. ISSUE Does FTCA permit assertion of pendent jurisdiction over additional parties? RULE This is a pendent-party jurisdiction - jurisdiction over parties not named in any claim that is independently cognizable by federal court. Jurisdiction did not exist independently over the added parties. In interpreting the statute, against the United States means against the United States and no one else. Congress found this troubling b/c FTCA had to be in fed court so you had to split actions, against judicial efficiency and possible unfairness to Ps in having to handle 2 claims in 2 courts. Claims satisfy Gibbs test, so why no jurisdiction? - Look again to posture and statute o Citing Kroger, Scalia says were going to treat cases involving new parties different from cases involving new claims. He doesnt really explain why. o Statute: FTCA - Strict textual interpretation Congresss Response: Supplemental Jurisdiction 28 U.S.C. 1367 (a) Is there a federal anchor claim? Broad grant of jurisdiction
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(b) Narrows supplemental jurisdiction under Diversity (c) When district court can decline supplemental jurisdiction - Codifies the Gibbs discretionary factors (like the squint test) - Court will not worry about diversity of added parties when the anchor claim is federal q Supplemental Jurisdiction Analysis First see if added claims have original jurisdiction under 1331 or 1332. If not 1367 1367 (a) - Is there at least one federal anchor claim? - Does this satisfy the Gibbs requirement of same nucleus of operative facts? - Does it matter there are added parties? o No. Last line of (a) explicitly tells Scalia hes wrong. 1367 (b) - If its a federal q case, (b) is about diversity, so omit (b). - If the anchor claim is based on diversity, then see if supp. J is based on any of the FRCP indicated o If yes, then no supplemental jurisdiction over the added parties o See how the parties are being added and whether they come in as P or D o If there is an amount in controversy problem for added parties, (b) still fails 1367 (c) - Codifies the Gibbs discretionary factors (like the squint test) - Court will not worry about diversity of added parties when the anchor claim is federal q 1367(a) - is a broad grant of supplemental jurisdiction over other claims within the same case or controversy, as long as the action is one in which district courts would have original jurisdiction 1367(b) court says that there are exceptions, where a district court shall not have supplemental jurisdiction: Over claims by plaintiffs against persons made parties (joinders) Or outsides who want to be intervened Exxon Mobil v. Allapattah (2005) amount in controversy for joined Ps EXXON CASE: Lots of dealers allege intentional and systematic scheme to overcharge them for oil. 1332 used to get into federal court. Unanimous jury verdict for the plaintiffs. Appealed because many Ps did not meet the amount in controversy requirement. Affirmed by the 11th Circuit Court of Appeals, ruling that 1367 allows multiple plaintiffs supplemental jurisdiction, regardless of the amount-incontroversy requirement. Court wants to preserve the Complete Diversity Rule, because constitutional minimum is minimal diversity. Exxon said that at least with the amount in controversy matter, we have supplemental jurisdiction. (if there is diversity, but the amount is not met in all cases, you DO have supplemental jurisdiction). However, if we just switch the requirement, (where diversity is not met but amount is met) Exxon court said that you DO NOT have Supplemental Jurisdiction. As long as there is one claim where the amount in controversy requirement is met, the district court has jurisdiction. But if there is not complete diversity, and the amount in controversy is met, there IS NO SUPPLEMENTAL JURISDICTION. STARKIST CASE: Girl cut herself badly on a can of Star Kist tuna. Mom joined in the suit. District Court: Summary judgment that none of the members had met requisite amount in controversy. Court of Appeals for first circuit states that the girl met the minimum requirements BUT 1367(b) is interpreted to
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mean that no original jurisdiction if one plaintiff fails to satisfy the amount-in-controversy requirement of 1332. ISSUE Does 1367 require that joined plaintiffs in a suit where anchor claim is based on 1332 need to satisfy amount in controversy requirement? RULE 1367 does authorize supplemental jurisdiction to joined Ps who dont satisfy the amount in controversy requirement in suits where the federal anchor claim is based on diversity jurisdiction. Kennedy says that 1367(b) does not apply here. It qualifies the broad rule of (a). Looking at (a) broadly, it conveys supplemental jurisdiction to parties who do not meet the amt in controversy requirement. The purpose of complete diversity is not diminished by joining such a party. There is no problem with the contamination theory adding a party changes our purpose for having federal jurisdiction. This is only makes sense in complete diversity problems. Moreover, 1367 explicitly bars jurisdiction for Ds joined under Rule 20, not Ps. DISSENT Ginsburg says that if the anchor claim is based on diversity, you have to look to 1332. Congress has required amount in controversy For determining whether Supplemental Jurisdiction exists -independent basis could these claims, on their own, be in Federal Court? -No not, then the only way they can be in Federal Court is with Supplemental Jurisdiction (1367) State Farm Mutual Auto v. Greater Chiropractic Center US DC, FL 2005 - amount in controversy for joined Ps FACTS Insurers (P) sue 4 practices owned by the same couple for unlawfully submitting medical treatment claims. 2 providers met amount in controversy and 2 did not. DC held that 2 that did not do not have supplemental jurisdiction. ISSUE Whether court has a basis for exercising supplemental jurisdiction over other 2 claims? RULE DC was correct in ruling. Looking at statute, SJ does not apply when parties are joined under Rule 20. That is they do not meet the requisite amount in controversy. In this case, the amount in controversy is the only jurisdictional ingredient that appears potentially to be lacking. At issue is whether or to what extent the Insurers have properly invoked diversity jurisdiction. The Court concluded, however, that section 1367(b) did not preclude the exercise of supplemental jurisdiction over claims by plaintiffs joined in the civil action according to Federal Rule of Civil Procedure (Rule) 20. Only difference b/w two cases above are that statute allows for adding Ps under rule 20 but not Ds under rule 20. Hypo: An applicant sitting for NJ bar, brought action against NJ, saying that NJ violated its right because he didnt graduate from an accredited law school. Can this go to Federal court? Diversity? No NJ-NJ (diversity involves diversity and amount in controversy) Is there a Federal Question Jurisdiction? He is claiming violating of US Constitution and State Law o We dont want to keep reexamining jurisdiction throughout the case o If all the federal claims are dismissed, a district court may choose to decline jurisdiction, but it doesnt have to. IT IS A MATTER OF DISCRETION! o Federal court can hear it because the jurisdiction was proper in the first place, btu when all the claims are dismissed, they may still decide to keep it.
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o This is only where that is the only way it got into Federal Court, and that is the only grounds for it
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Removal
28 USC 1441 removal How can a Defendant override that initial filing and file somewhere else? Any civil action brought in state court of which district courts have original jurisdiction may be removed by defendant to the district court. Some restrictions: - If the complaint has been filed in any of Ds home state, any D cant remove it to federal court unless jurisdiction would be founded on a claim that arises under fed law - All Ds must agree to removal - Must comply with time limits Rationale Ds should have choice of federal courts if fed courts have jurisdiction (fed question or out of state resident who feels prejudice) only allowed to remove where P could have taken to fed court to start -Removal statute applies to cases, not claims; so entire suit is removed, including any related claims that the federal court has power to hear under supplemental jurisdiction -Venue rules do not apply in removal cases - only when started in fed court to begin with 28 USC 1446 and 1447 Process for Removal -1446(a) - Filed notice to appropriate fed court with all pleadings, process and other papers on file of state action w/in 30 days of receiving the Ps pleading (b). State court immediately loses jurisdiction -Can be given back if not followed proper procedure -If somebody is added who destroys SMJ, then court can deny or permit (1447) Section 1446 has the procedure for removal. Time frame: From that time that you are on notice (defendant) then he has 30 days. Upper limit on that is that after year, it cant be removed. What protects against improper removal? Rule 11 28 USC 1359 parties collusively joined or made. Where a party has been joined or invoked improperly to gain jurisdiction Improper or collusive joinder caselaw cases where a court has stepped in and said you only joined for improper reasons Difference b/w Transfer of Venue and Removal -Transfer goes from one district court to another; removal goes from state to federal court -Transfer displaces Ps geographical choice; removal displaces Ps choice of state court system for fed system in same geo area Car Crash Hypo Guy moving his family in Audi. Wife and kids get into accident on way from NY to AZ in OK. He wants to sue in state court, but he is suing Audi too, so he needs to find another D who is in OK so he cannot remove to Fed Court. What can you do?? Claim under $75K dont want to do this though Look for somebody else to sue Claim that P is not a NY resident anymore b/c moving to AZ
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CHOICE OF LAW: ERIE DOCTRINE

Erie APPLIES TO CASES IN FEDERAL COURT SITTING IN DIVERSITY Question: Should the state law or federal law apply when federal court is sitting in diversity?
Rules of Decisions Act: the laws of the several states, except where the Constitution, treaties, or statutes of the United States shall otherwise require or provide, shall be regarded as rules of decision in trials at common law in the courts of the United States in cases where they apply. Rules Enabling Act: 2072 all laws in conflict with Rules shall be of no further force or effect after such rules have taken effect. Rules shall not abridge, enlarge, or modify any substantive right. -SC has power to prescribe DC and CoA rules of procedure, practice and evidence for cases in their courts -Rules should not abridge, modify or enlarge any substantive laws if they do, they will not be used in that case Constitution: I. Article III, Sec. 1: power invested in fed courts
50 II. Article I, Sec 8: necessary and proper clause (Congress has power to make all laws which shall be
necessary and proper) Background: Swift v. Tyson (US 1842) later overruled III. Holding: Laws of several states in Rules of Decisions Act does not mean state common law. Federal courts sitting in diversity are not obligated to follow decisional precedent of states (though they do have to follow state statutes). A. Laws as brooding omnipresence in sky, not reflections of state public policy B. True set of correct principles out there and fed/state judges could discern these principles IV. Problems: 1) seen as favorable for large corps (national corps would removed to fed court to get fed common law); 2) hard to predict outcomes b/c relying on gen fed common law The Swift doctrine is unconstitutional and is not a proper construction of the Act. In Swift, the phrase laws of several states was interpreted as the local statutes of the states or long established customs. It did not include state common law, which was perceived to be evidence of law, but not law itself. This is erroneous. Overruled Swift and held that Rules of Decision Act required application of the written and unwritten substantive law of the states in diversity cases. The Swift doctrine also has problems. It creates discrimination by non-citizens against citizens. Rights under general law varied between state and federal court, and the privilege of selecting the court was given to the non-citizen. Equal protection under the law is undermined. Also, the Black & White Cab v. Brown & Yellow Cab case demonstrates another problem. Brown & Yellow, Kentucky corp., reincorporated in Tennessee so it could enjoin B&W in federal court from soliciting business at a RR station. It would not have been able to do so under Kentucky common law. Creates problem of forum-shopping. Black & White Taxicab v. Brown & Yellow Taxicab (US 1928) Facts: under KY law, contract would be void, but under fed decisional law, contract would be enforced. Corp reincorporated to et into fed court to have contract enforced. This bothers Erie court Note: now this case would not happen b/c of 1332 Erie Railroad Co. v. Tompkins (US 1938) overturns Swift and Black & White Facts: P (PA) was hit by door of Ds train (NY): P(PA) Erie RR (NY) i. State Law: wanton and willful (better for D) (would apply under Erie) ii. Fed Law: negligence (better for P) (would apply under Swift) Issue: Shall Swift v. Tyson be disapproved? Holding: Yes. Except in matters governed by Constitution or by Acts of Congress, the law to be applied in any case is the substantive law of the States (statutes and common law). PA state law applies. Erie is only applicable when no controlling federal statute. State common law controls in substantive matters. Fed Rules and policies control on matters that are essentially procedural. iii. Interprets law under Rules of Decisions Act to include common law and statutes (vs. in Swift which just said includes statutes). 2. Still open question though about what is substantive vs. what is procedural Erie says you have to state law to substantive (dealing with outcome, pertaining to the rules of right which courts are called on to apply, as distinguished from rules of procedure) issues (as opposed to procedural). If it affects the outcome, is it substantive?
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Guaranty Trust Co v. York (US 1945)- NOT used anymore ( OUTCOME DETERMINATIVE TEST) Facts: note holders sue trustees for failure to protect interest of note holder i. State Law: statues of limitations had run (better for D) ii. Fed Law: statute of limitations may not have run (better for P) Holding: Apply state law. Labeling substantive and procedural is not clear, so concerned with outcome of the litigation. iii. Outcome-determinative test: required federal courts to apply state law, as matter of policy, where using a separate rule could lead to a different outcome a. If outcome determinativeapply state law iv. a statute that would completely bar recovery in a suit if brought in a state court bears on a state-created right vitally and not merely formally or negligibly; so if bars recoveryapply state law v. Problem: lead to confusion when outcome would change sometimes Normally, you look for distinction between matters of substance and matters of procedure to determine if the federal court may disregard the state law. However, that is an abstract distinction. The purpose of the Erie doctrine was to ensure that in federal diversity actions, the outcome in the federal court would be the same as if it were tried in state court. Federal court should follow state law when the consequences intimately affect recovery. Outcome Determinative Test if disregarding state law would significantly affect the result of the litigation in fed court, then must use state law. Byrd v. Blue Ridge Rural Electric Cooperation, Inc. (US 1958) countervailing federal interests/balancing Facts: Employee is injured on job. vi. State rule: judge determines whether individual is an ee under state statute vii. Fed rule: possible that jury would decide issue Issue: Does fed court, sitting in diversity, have to apply state rule? Holding: Fed rule here. May be that outcome would be substantially affected by whether the issue of immunity is decided by judge or a jury, but outcome is not the only consideration. Need to consider affirmative countervailing considerations (where application of state law would greatly upset basic functions of fed judiciary, law should not be applied) This case is Constitutionally informed (doesnt directly apply b/c if it did then would be dictated by Rules Enabling Act to follow Constitution), but Amendment VII is at least tangentially implicated and is fed interest here Framework of Byrd: Fed courts in diversity cases MUST: respect definition of state-created rights and obligations by the state courts determine whether [state rule] is bound up with these rights and obligations in such a way that its application in the federal court is required Fed courts in diversity SHOULD: conform as near as may beto state rules even of form and mode where the state rules may bear substantially on the question of whether litigation would come out one way in the fed court and another way in the state court if the federal court failed to apply a particular local rule viii.UNLESS there are affirmative countervailing considerations There is no reason or principle behind SC common law practice. Although Erie has been interpreted such that federal courts should conform to state court rules as nearly as possible, we must also consider the federal court policy of distributing trial functions between judge and jury. This distribution is dictated by the 7th Amendment. The federal policy of jury determination of disputed fact questions should trump the
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interest in having a state decision come out the same as a federal decision. Court held that outcome derivativeness must be evaluated with weighing the importance of state rule to state substantive policies against the federal interests embodied in the federal practice termed the balancing approach. Byrd HYPO:
ix. State law: tort cases must be tried to judges and not juries x. US Constitution/Amendment VII: right to a jury a. Would go right with Constitution here b/c of Rules of Decision Act
Constitution, and law of US and all treaties made or which shall be made under authority of US shall be supreme laws of land and judges shall be bound thereby Hanna v. Plumer (US 1965) Facts: Auto accident. P thinks he satisfied Rule 4 by serving summons on D by leaving it with adult at his home. D thinks MA law applies, which requires personal delivery. D moved to dismiss for improper service (FRCP rather than unwritten federal practice in direct conflict with state statute); P (OH)D (MA). No dispute over whether there is actual notice; D got actual notice. MA statute: service on executor must be by hand, acceptance of service by executor or by notice in probate court (D wants this b/c P cant go forward with claim) FRCP 4(d)(1): required leaving summons and complaint at his home with a person of suitable age and discretion Issue: Does fed court, sitting in diversity, apply state law or FRCP 4(d)(1)? Holding: Federal Rule. xi. Hanna 1: Refined Erie Test a. Modified Outcome Determinative Test based on twin aims of Erie: i. 1) discouragement of forum shopping and 2) avoidance of inequitable administration of the laws ii. do this analysis asking BEFORE litigation, would it matter to litigants in bringing to fed or state law? xii. Hanna II: What do you do when you have a Fed Rule of Civ. Pro that is source of law (not Erie) a. Federal Case Lawanalyze under Erie b. Federal RuleDONT go through Erie analysis i. Apply rule UNLESS 1. State and fed rule are not in conflict 2. Outside scope of REA a. (rules shall not abridge, enlarge, or modify any substantive right 3. No authority in Constitution a. Article III, Sec 1: power invested in fed courts b. Article I, Sec 8: necessary and proper clause (Congress has power to make all laws which shall be necessary and proper) In cases where the collision between state and federal law is unavoidable and clear, federal law will govern if the rule is allowed by the Rules Enabling Act (deferential), and the rule is constitutional grant by the Necessary and Proper Clause (deferential). Choosing Rule 4(d)(1) does not entice forum-shopping. If fed rule is valid under Rules Enabling Act and the US Const, and is applicable to the issue at hand, then fed court is bound to use it. Valid under REA = be procedural and cant modify any substantive rights. So many people have signed off on fed rules that they are probably valid.
53 3. HYPO: i. State Statute: service on executor must be by hand, acceptance of service by

executor or by notice in probate court ii. Federal CASE LAW: service on executor can be at residence with some person of suitable age and discretion then residing therein a. Do modified outcome determinative test with twin aims of Erie (is this generally something that litigants care about when going to fed or state court? Not likely (this is like legal or letter size paper e.g.) Ragan US 1949):
iii. State law: civil action started when summons is served on D iv. FRCP 3: civil action is commenced by filing a complaint with the court a. Argue that they do not conflict/fed rule is not on point so not in Hanna!;
therefore, apply Erie; could also try to argue that FRCP 3 is unconstitutional or beyond REA v. Note: Hanna did not overrule Ragan though Hanna prefers FRCP; diff is that rules were not in conflict in this Ragan Facts: P files complaint (FRCP)statute of lim runsservices complaint (state rule) State law: civil action started when summons is served on D FRCP 3: civil action is commenced by filing a complaint with court (P would be out of court) Holding: Apply state rule so cant go to court (they are not in conflict so go to Erie analysis) Stewart Organization, Inc. v. Ricoh Corp (US Facts: State Law: disfavors forum selection clause 28 USC 1404 venue (fed statute): for convenience of parties and witnesses, in interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought Issue: Whether a federal court, sitting in diversity, should apply state or federal law in adjudicating a motion to transfer a case to a venue provided in a contractual forum-selection clause. Holding: Fed statute applies. 1) Is the statute on point/in conflict? a. Yes. 1404 is really broad and covers state law: courts have discretionary decision on transfer as part of exercise of discretion, they can consider private agreement between parties 2) If so, is this a valid exercise of authority under the Constitution? b. Yes, under Article III and Necessary and Proper Clause. STATUTE OF LIMITATIONS CASES: Both Ragan and Walker go with state rules bc the FRCP and state law do not conflict (FRCP just applies to other fed rules and state law is more integral to statute of limitations). Walker v. Armco Steel Corp (US 1980) Facts: Carpenter injured by a nail and brought suit against the manufacturer. State law: action commenced when summon is served on D FRCP 3 governs manner in which action is commenced including tolling of state statute of lim.
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Issue: Whether in absence of federal rule directly on point, state service requirements which are an integral part of the statute of lim should control in an action based on state law which is filed in fed court under diversity jurisdiction. Holding: state law. FRCP is narrower than state rule, which is tied to policy considerations of statute of lim (the rule also affects peace of mind and affects how people act) and so they can coexist. They do not conflict so do Erie analysis. Court says The Hanna test can only be applied if the scope of the Federal Rule in question is sufficiently broad to control the issue before the court, and the state law and federal law conflict directly. The purpose of Rule 3 was not to trigger statutes of limitations, so the federal rule isnt broad enough to conflict with the state law (therefore we dont use Hanna test). Affirmed Ragan above. Why dont they conflict? o Fed rule is for timing of actions in fed court which does not include statute of lim o State rule is an integral part of statute of limitations which is important to state Conclusion: state law is substantive Burlington Northern Railroad Co. v. Woods (US 1987) READS RULE MORE BROADLY Facts: - Al State Statute: 10% affirmance penalty (for imposing frivolous appeals) - FRAP 29: if court of appeals shall determine that an appeal is frivolous, it may award just damages and single or double costs to the appellee Holding: Apply state rule bc 1) they are in conflict and 2) therefore go to Hanna II (almost always will apply bc everyone signed off on it; rare challenges though) Line of cases: o Walker and Raganno direct conflict (go to state rule) o Stewart Org (statute) and Woods (FRAP)conflict (go for fed rule) o How to determine if conflict or no conflict? Walker (goes for fed rule): FRCP 3: a civil action is commend by filing a complaint with the court Woods (goes for state law): FRAP 28: if court of appeals shall determine than appeal is frivolous, it may award just damages and single or double cots to he appellee Why difference? 1) Fed rule is discretionary in Woods so allows for broader read (so in conflict) 2) Assess whether aims are same for rules (if yes, more likely in conflict) o Woods: both aimed at curtailing friv appeals (so in conflict) o Walker: fed law aimed at timing and state law aimed a putting these to rest, policy considerations (so not in conflict) ON EXAM: Argue that there are two options: 1) one is to challenge conflict and other is to 2) try to argue they are in conflict and do fed statute category analysis (though hard sell) Gasperini v. Center for Humanities, Inc. (US 1996)- Applies state rule for Issue 1 and fed rule for Issue 2 Facts: Photojournalist had 500 slides and gave them to Center for Humanities Inc and they lost them. He brought suit in US District Court for SDNY. Both agreed about liability and fought over damages. District court found for P. Court of Appeals vacates judgment, applies state rule to figure out if too much and says will order new trial. Issues: What standard of review governs on a motion to set aside a verdict for excessiveness?
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- What court applies the standard? Holding for Issue 1: - NY State Law: Judicial review of jury award for whether it deviates materially form what would be reasonable compensation - Federal judge-made formulation: shocks the conscience - Apply state law bc no fed rule on point here/no conflict! Need to do modified outcome determination test looking at twin aims o Litigants could choose forum based on diff in standards (be could recover a lot more under fed rule): If shocks conscience standard, not so many times damages would shock the conscience and more often will deviate materially from what would be reasonable compensation o Court also argues that this is a generalized movement toward tort reform bc worried about runaway juries; one way of limiting this is to get courts to step in; therefore state law is substantive! Holding for Issue 2: - NY State Statute CPLR 5501(c): appellate court reviews de novo (basically get two chances to argue from scratch; if lose in trial court, can go to court of appeals and argue gain with no deference to first dec - Fed-Judge Made Formulation: within reasonable range, even if appellate court would come to diff conclusion if starting from scratch, they will still defer to it - Is definitely a conflict here. Do modified twin aims outcome determinative test; also INFORMED BY CONSTITUTION HERE (Byrd countervailing fed interest) so apply fed law o Court says such a strong federal interest here in allocation of diff levels of court that probably wouldnt come out differently even if went with twin aims o If argued for twin aims: could be a difference here: could argue you would prefer state law if given choice bc you get two clean shots
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FRCP
Hanna II 1) Is it on point? If yes, proceed to 2 and 3. If no, then decisional law category (Erie) analysis.
Decisional Law (burden of proof,

forum non conveniens) Erie and Hanna 1 -fed courts sitting in diversity, apply state substantive law and federal procedural law
US Constitutio n
Constitution applies b/c of Supremacy Clause and Rules Decisions Act
Fed Statute
Stewart Org 1) Is statute on point/in conflict? If not, go to Erie category. 2) If so, is this a valid exercise of authority under the Constitution (see Article III and Necessary and Proper Clause in Article I)
(Federal courts have interpreted the Federal Rule, however, with sensitivity to important state interests and regulatory policies Gasperini . THINK ABOUT STATE INTEREST (So if this is something that is really important to the state, then maybe read Fed rule more narrowlysaying rule is just about Ds offers) OR is it like Woods where it is read more broadly (bc same underlying purpose to penalize frivolous appeals)
Modified Policy Driven Outcome Determinative Test looking at Twin Aims of Erie: 1) forum shopping and 2) inequitable administration of the laws; look at BEGINNING of lawsuit Also consider strong state interest of if fed law is informed by Constitution so there is a strong countervailing federal interest (see Gasperini and Byrd)
2) Is it valid under the Rules Enabling Act? (see above for def; gives power to fed regarding procedure; such rules shall not abridge, enlarge, or modify substantive law) -The test must be whether a rule really regulates procedure (Sibbach v. Wilson) procedure is really much broader than it is in Erie 3) Is it within the Constitutional Scope? Article III, Sec 1 and Article 1, Sec 8 (necessary and proper clause) Hanna II: very strong language saying only if we were wrong; Congress has 8 months to sit on it and think about it so its a very high burden to decide Fed Rule does not apply. NOT ERIE
note: if contract claim, covered by state law (however, burden of proof, who decides jury or judge, who gets phys examination are all gray areas)
Federal courts sitting in diversity apply state substantive law (Erie interpretation of Rules Decisions Act) and federal procedural law (Article II, Sec 1 and Article I, Sec 8 necessary and proper clause) on matters that are essentially procedural. NOT ERIE
DO NOT LOOK AT RULES ENABLING ACT; generally, do not look at state law or interest or balancing it with Congressional interest; just asking if Congress had power to pass statute NOT ERIE
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Joinder
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JOINDER OF CLAIMS
Rule 18 Joinder of Claims -Can join as many claims of any kind as the party has against he opposing party -Applies to parties making original claims, counterclaims, crossclaims or 3rd party claims -All of these must comply with SMJ and venue requirements Counterclaims Rule 13(a)-(f) Counterclaims -Classified as Compulsory or Permissive -13(a) Compulsory arises out of same occurrence or transaction that is subject matter of original claim -Must assert or estopped to do so in any future action -13(b) Permissive claims that do not arise out of same occurrence or transaction; can be raised by party during original claim or later action -Compulsory usually means supplemental jurisdiction exists b/c both need to arise out of same transaction Grumman Systems Support v Data General N.D. CA 1988 FACTS Suit 1 - DG (D) Copyright Infringement in DC MA Grumman (P) Suit 2/Counterclaim P Cartwright Act (State Antitrust) CA state ct D D (DG) removed case to ND of CA and asked for dismissal or transfer to MA (claiming it was a compulsory counterclaim). CA court dismissed and tells Grumman to bring it into MA action. Other two parties suing DG stay in CA. ADEX (program) made alleged to monopolize competition. ISSUE Does a logical relationship exist b/w the two claims to consider 2nd claim compulsory? RULE Using the logical reasoning test, yes there is. Both overlap a great deal. Cites following cases: Pochiro if there are facts that guides both cases, considered compulsory Mead Data v West Pub similar facts, but shoots down their ruling b/c they did not follow the idea of looking at judicial economy and efficiency when determining compulsory claims. Mericoid v Mid-Continent stated cant use 13(a) for antitrust, not valid anymore over time eroded. Compulsory counterclaim: pleading MUST state counterclaim that the pleader has against the opposing party It has to be part of the same transaction or occurrence. If you dont bring it up at the beginning, then you cant bring it up Permissive Counterclaim: a pleading MAY state as a counterclaiming Indemnification: is usually a part of counterclaims. Indemnification is only triggered when D loses. Tests used to determine Compulsory Arises out of the same transaction: Similar issues of fact and law raised by claim and counterclaim? Would res judicata bar subsequent suit on Ds claim absent compulsory counterclaim? Same evidence? o Same pictures, minutes, etc to support each claim Logic Relationship? o Policy - courts are interested in achieving efficient use of judicial resources, minimizing burden of parties and avoiding unnecessary impositions on witnesses o If it would undermine these goals to separate claims, then logical relationship exists
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Wigglesworth v Teamsters Local Union US DC (ED VA) 1975 Compulsory or Permissive FACTS P Violation of Rights under Labor Management Act D during union meeting D Counterclaim of libel and slander/abuse of power stemming from press conference after filing the suit P (D said mafia and alleged fixing of elections) Ps motion to dismiss of counterclaim for lack of SMJ is granted by court. ISSUE Was the counterclaim compulsory or permissive? Proper dismissal? RULE Counterclaim was permissive, so you need independent jurisdictional grounds to join claims. Motion to dismiss counterclaims granted there is no jurisdiction in itself because state law claim, need to do an analysis of supplemental jurisdiction. Bose v Consumers Union of US DC of MA 1974 Same issue as Wigglesworth court said to determine if they are out of the same occurrence, look at if the evidence would be the same to support or refute the claims. Counterclaim taking to Federal Court? There has to be other matter for SMJ. SUPPLEMENTAL JURISDICTION! 28 USC 1367(a) by definition, a compulsory counterclaim arises out of the same transaction or occurrence that is the subject of the opposing partys claim Once youve decided that this is a compulsory counterclaim, it also fulfills the supplemental jurisdiction requirements. NOT PERMISSIVE, though. you have permissive and compulsory in counterclaims, but NOT in cross claims STEPS TO DETERMINE IF YOU CAN HAVE COUNTERCLAIM: You would look if you can have the claims under the Joinder rules. (13 and 18) You also have to ask is there Subject Matter Jurisdiction? (can it be in fed. Court) If the answer is no, look at the supplemental jurisdiction statute Then ask, if its same case or controversy
Crossclaims
Rule 13(g) Crossclaim against a co-party -When one D sues the other; must arise out of same transaction or occurrence or be related to the original claim; may include another claim or a liability crossclaim for all or part of the original claim -Do not have to be asserted in original action, can be brought later on; unless the co-party brings crossclaim onto other D and then that D has to bring their claims up against the co-party -Usually the same main question as in compulsory counterclaims: do they arise out of same transaction or occurrence should mean supplemental jurisdiction as well
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Joinder of Parties
Rule 20 Permissive Joinder of Parties -20(a) - Can join either P or D if its arising out of the same transaction or occurrence and there are common questions of law or fact that will arise out of the action -20(b) Protective measure court can issue order (including separate trials) if it feels necessary against parties that have no claim asserted or it asserts o - You cant add any party that you want you have a more limited attitude towards adding parties than you do for adding claims -Still need to look at PJ, SMJ, and venue Rule 17(a) Real Party of Interest -Goal is to protect the legitimate interests of the D -Action must be prosecuted in the name of the real party in interest Rule 42 Consolidation/Separate Trials -Does the same thing as Rule 20 but it says the court can consolidate or separate, as it feels necessary Kendra v City of Philadelphia US DC EDPA 1978 Permissive Joinder Events extending PoT FACTS P family suing cops for constant harassment. Many incidents where family members were threatened, beaten and arrested unlawfully. ISSUE Was joinder of all Ps okay under Rule 20(a), specifically wrt are same transactions/occurrences okay b/c of long time span (14-15 months)? RULE Joinder is proper b/c all were w/in systematic pattern of harassment. Length of time is of no way attenuates the factual relationship among the events. Insolia v Philip Morris US DC EDWI 1999 Claims arising of Difference Circumstances FACTS 3 Ps join in suit against big tobacco. None really arise out of same action, all get cancer, smoking different types of cigs, etc. ISSUE Can Ps join together when their claims do not arise out of same transactions? RULE No. With all differences (diff cigs, started smoking diff ages, quit at diff times for diff reasons) it would not be efficient and could con use jury, which could lead to bias. Differences b/w two: Time issue, one is 15 months other spans decades Judicial Economy each individual would have diff set of facts for Insolia Rule 19 Compulsory Joinder of Parties for Ds Rule 19(a) Persons required to be joined if feasible 1. Required party. A person who is subject to service of process and whose joinder will nto deprive the court of subject-matter jurisdiction must be joined as a party if: a. That person claism an interest relating to the subject of the action and is so situation that disposing of the action in that personss absence may as a practical matter IMPAIR OR IMPEDE The ability to protect the interest Should the person be joined if feasible? 2. If Yes CAN the person be joined? a. If No, Can the action proceed without the person? Yes No Joinder required If No, no joinder required, proceed. (rare)
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Rule 19(b) IF a person who is required to be joined if feasible can not be joined, the court must determine whether in EQUITY AND GOOD CONSCIENCE the action should proceed. The court should consider factors that might prejudice the person or the existing parties The extent to which prejudice could be lessened or avoided -They would be considered unjoinable for 3 reasons, lack of: SMJ, PJ, or venue -Want complete justice or none at all; goal is not to dismiss if at all possible -19(b) court usually will not dismiss here unless there is an alternative forum available Helzberg Diamond Shops v Valley West US CoA 8th Cir 1977 FACTS D (IO) and P (MO) entered into contract so only 3 jewelry stores be in mall (incl P). D added 4th, P sued. DC MO granted injunction. D moved for dismissal b/c Lords was not a D, denied. P won, CoA affirms. ISSUE Was Lords an indispensible party, and if so can they be joined? RULE Look at all factors set out by Rule 19(b) and not an indispensible party. Lords was a party to be joined if feasible (Rule 19(a)) and b/c there was no PJ over Lords the court had to determine if the party was indispensable (Rule 19(b)). Under 19b it wouldnt be prejudicial to Lords and it wouldnt be prejudicial to not to enjoin. In fact inconsistency in judgments is purely speculative. 4 factors: 1) No prejudice against Lords they can still have their day in court 2) DC offered Ls chance to intervene they chose not to 3) Everyone who has claim here was present 4) If dismissed, no other court really to go to (maybe another DC) Provident Bank v Patterson US SC 1968 FACTS Car accident, driver, 1 passenger, and other driver dies. Pass2 is injured and brings suit against driver, and car owners insurance company. Pass2 wins trial and D appeals. CoA dismissed case b/c driver was indispensible party and he could not be joined b/c PA Dead Man Rule. SC rules CoA erred in not allowing judgment to stand. ISSUE Whether CoA erred in granting dismissal per Rule 19? RULE Yes, ruling should have stayed. CoA did not go through the 4-factor rule, they erred in this. They can proceed w/out this person. There are ways to get around having him in there. Dont pay until owner is in the clear. Looks like the insurance company is just trying avoid paying, they brought it out so late in the game.
while "necessary" parties must be joined if that joinder is possible, the litigation will continue without them if joinder is impossible. If "indispensable" parties cannot be joined, by contrast, the litigation cannot go forward.
Often, an indispensable party is any party whose rights are directly affected by disposition of the case. If they cant be joined, then the matter must be dismissed. The indispensable party is often a prudential standing requirement. That is, while the parties currently involved in litigation have an actual case or controversy, judges will not proceed without the indispensable party. This avoids potential double litigation and possibly inequitable outcomes. In determining whether a party is indispensable, courts generally look to three factors: 1. Will the missing party's interests be harmed in some direct way by the outcome of the case?
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2. Does the missing party have an interest which would cause another party to the case to be subjected to multiple obligations? 3. Can the court provide complete relief to the plaintiff without the presence of the missing party? FRCP 19 Summary Should the person be joined if feasible? Absence prevents complete relief amont exising parties Absence impedes absent partys ability to protect interest Absens exposes parties to inconcsistent obligations If not feasible, can action proceed without the person? Equity and good conscience Factors to be considered include: o Absence prejudices o Prejudice could be avoided o Adequacy of judgment in absence
o Adequate remedy for p if case is dismissed SUMMARY

Joinder of Claims Broad FRCP 18 (if you have one good claim, you can throw it other things as well) Counterclaims FRCP 13(a) and *(B) Cross Claims FRCP 13 (G) Joinder of Parties Real Party in interest FRCP (17) Permissive Joinder of Parties FRCP (20) same transaction or occurrence Joinder of Additional Parties (Rules 13(h)) Joinder of Parties Needed for Just Adjudication (FRCP 19) mostly used by defendants to get a case dismissed Interpleader (FRCP 22) Pimentel very specific situation that this deals with. o Insurance policy for deceased, two people claim that policy. The insurance company doesnt want to give it to one client and hten have to be sued by the other. In this case, insurance is the plaintiff and the other two are defendants o Other situation is that if the insurance company is the D and is being sued, they can do an interpleader and bring in other party
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Interpleader
Paradigm: an insurance policy, and two people claiming to be the spouse and both are claiming
that they have a right to the policy. Ex. 100,000 and metlife wants to pay it out just once. Rule 22 -Two parties claiming property or equity (anything that is fixed fund) from 3rd party, 3rd party gives up item under claim (interpleads) and the 2 remaining parties duke it out in court -2 sources, this rule and a statute -Use when all claimants are co-citizens Statute Interpleader 1335 -DC has right to interpleader action -Cannot be used as all-purpose bill of peace SF
To discuss diversity, we wouldnt look at our regular diversity statute. Since this is interpleader, we look at 1335. You need two adverse claimants. As long has Ds are from two different states, you have adverse diverse claimings. P(OR) D (OR) and D (CA) this is good. Is this constitutional? Interpleader requires only MINIMAL diversity that is diversity of citizenship between two or more claimants, without regard to circumstance that other rival claimants may be cocitizens. State Farm Fire v Tashire US SC 1967 FACTS Bus crashed, bunch of people sued Greyhound. 4 Cal residents sued Cal corp (Greyhound), bus driver, truck driver, and truck owner (all 3 were OR residents). The insurer of truck driver (State Farm) says they have max liability of $20K so they give to court and get the F out of there. Greyhound jumps in w/ SF, TC allows them to. SC allows the interpleader, but kick Greyhound out of this claim per statute 1335. ISSUE Is interpleader allowed? Did COA err in dismissing? RULE Yes, it is allowed. SF is potentially liable if truck driver is found liable, so they can proceed even though td has not been found liable yet. One claimant could wind up with all $20K if their trial ends first, not fair. Found that Greyhound cant jump in there. 1335 is not an all-purpose bill of peace. Philippines v Pimentel US SC 2008 Using Statutory Impleader FACTS Marcos, former president of Philippines, stole a bunch of land and held it under a corp called Arelma, Merrill Lynch was in control of corp. Class of people sued the pres for their land back in another suit, which they won. So they want to recover from Arelma, but so does the Philippines govt (the Republic and Commission of pres). ML interpleads and gives assets to court. Republic and Commission asserts sovereign immunity and move to dismiss under 19(b) they are indispensible party. DC denies, CoA grants and enters stay until Philippines court has outcome. DC removes stay and awards assets to Pimentel class. CoA affirms. ISSUE Whether under Rule 19, case should be dismissed without Republic and Commission?
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RULE Case should be dismissed. Looking at all 4 factors 1) Insufficient weight given to R&C interests 2) No alternative proposed, and there appears to be none 3) Adequacy means dispute be settled as whole, not happening b/c R&C are not bound by decision 4) CoA made error thinking class was P, it is really ML; would not provide them with completion of matter, but any prejudice against ML is outweighed by prejudice against R&C Rule vs. Statutory Interpleader: Can do it two ways decided by lawyers Rule 22 1335 Service FRCP 4 Nationwide Venue D = Residence and substantial Residence of 1 or more claimants events Diversity Needed Complete Minimal
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Impleader
Rule 14IMPLEADER (Third Party Practice) (1) who is or may be liable to [P] for all or part of the claim against [D] (2) 3rd party D can make claims against D1, new party, or original P -More efficient combine 2 cases into one -Must be out of same transaction or occurrence -Impleader party can escape liability through showing not liable for P original or D impleader claim When can a DEFENDANT party bring in another party? P D Third Party (Triangle) Rule 14 someone who is or may be liable for all or part of the claim Hypo: 2 car accident, passenger 1 sues driver two. Can driver 2 bring in the driver of the first car can they do that under Rule 14? No. You NEED a liability from third party to the second party (D) That brings the third party in. Its not just a substitution in. It has to have a liability or claim. Rule 14 is a narrow claim. The third party brought in has to be liable to that defendant. 14(A)(1) contribution if youre sued and the P could sue any one of the people involved, and could recover entirely, that person could then sue the other people who contributed to the accident A simple causal link will not give rise to liability. There has to be some sort of substantive obligation. Does the 2nd party HAVE To bring in the third party? No. the rule says that impleader is not mandatory, they may bring them in. They can bring them in another suit, but this is just an option for the second driver. The third part could do a counterclaim against the second party. Clark v Associates Commerical Corp US DC KA 1993 FACTS P was late on loan payments of tractor. D1 hired Howard (D2) to repossess tractor who hired Clark who hired Lett. In process of repossession P broke his leg and there was damage to his property which he is suing for. D1 alleges indemnity claim against D2 for any amount D1 is held liable to P. ISSUE Was D2 properly joined under Rule 14? RULE Yes, basis for indemnity is agency theory. D2 liability does not rest on duty, proper only if D2 is or may be liable to third-party plaintiff. Strong emphasis is put on efficiency and impleader is generally allowed unless there is some sort of prejudice.
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Intervener
Rule 24 -(a) Intervention AS OF RIGHT- nonparty has right to intervene when: (1) claims an interest in subject, (2) disposition would impair its ability to protect that interest, and (3) their interest is not adequately represented by the existing party -Requires timely application and will be denied if acting party has same interest (unless collusion) -(b) Permissive Intervention - to promote efficiency, may be granted to party who shares common question of law or fact - if you have a conditional right or an interest in the subject of action, then you may intervene unless existing parties adequately represent that interest -Again, must independently qualify for SMJ, PJ, and venue
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Claim/Issue Preclusion
Bring all the related claims you have (at least against one defendant) in a single action, or lose the ones you leave out. Claim preclusion (res judicata); o a party who once has had the chance to litigate a claim before an appropriate tribunal usually ought not to have another chance to do so. o Claim preclusion is the principle that supports that a party who has had their day in court to litigate against a defendant should not get another chance to litigate against the defendant. issue preclusion (collateral estoppel) o A related but narrower principlethat one who has actually litigated an issue should not be allowed to re-litigate it. o primarily determined not by whether the evidence offered in the second action is the same as that in the first action, but by whether that evidence was fairly accessible to the party in the first action. o The question for preclusion is: Was the opportunity full and fair? o For issue preclusion, final judgment includes any prior adjudication of an issue in another action that is determined to be sufficiently firm to be accorded conclusive effect. o stops parties from relitigating issues that were actually litigated and were necessarily decided by the court. It doesnt matter if its the same claim as the first one. Also, doesnt have the to be the same parties. focus issues that were actually litigated and were essential to the judgment in the first action . Mutuality of Estoppel: A party is bound by a finding in an earlier action if the opponent in the subsequent action would have been bound if the finding has been the other way.
Four prerequisites for res judicata: 1. There must be a final judgment a. Some courts will hold a judgment as final once it is final in the trial court even if there is an appeal pending some courts require the time for appeal to pass. 2. The judgment must be on the merits a. Not judged on the merits if dismissed for improper jurisdiction or venue b. The court does not need to decide on the facts or conduct of a trial for it to be on the meritsas long as the party had a full and fair opportunity to litigate whether or not they exercised that opportunity. 3. The claims must be the same in the first and the second suits. 4. The parties in the second action must be the same as those in the first (or have been represented by a party to the prior action). Two forms of preclusion
68 1. Merger- claimant won and claim is merged into the judgment and the claimant can enforce their
judgment (get their money). a. Claim extinguished and replaced by the judgment. 2. Bar- When claimant lost; prevents repeated claims on the same issue Merger and bar prevent claim-splittingprevent blatant multiple tries for different aspects of the same thing. Finality Stare decisis is a form of finality. This applies to all future litigation. Stare decisis: About questions of law. (SC has more leeway to change law and modify decisions) Claim/issue preclusion: about questions of fact Law of the case: decisions about things like scope of discovery or what issues are going to be litigated arent generally going to be revisited. That becomes the law of the case.
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Claim preclusion
What is a claim? Cause of action Restatement 24: 1. The claim extinguished includes all the rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction; or series of connected transactions, out of which the action arose. 2. Transaction is relevant facts that establish legal liabilitywhat a transaction is will be determined on a case by case basis; facts related in time, space, origin, motivation. 3. Claim preclusion requires: (1) Valid (2) Final (3) on the merits Manego v Orleans Board of Trade US CoA 1st Cir 1985 Same Claim of Cause of Action FACTS P tried to get license for disco near ice skating rink. P was denied. VP of bank that owned rink was also on board of traders who had pull on issuing licenses. 1st suit P sued for conspiracy in fed DC. SJ for D. CoA affirmed. 2nd suit after board gave license to another person, P sued again for violation of antitrust acts. Added new parties to 2nd suit, board of selectmen and bank. ISSUE Does the first case bar the 2nd from being heard? RULE Yes, different legal theories does not mean different transactions. Have to use the transactional approach, which in this case shows it is barred. Parties are not really different b/c the people hold positions in multiple parties. Should have brought the 2nd theory in the first suit. Due diligence would have dug up this theory. Transactional Test Restatement (Second) of Judgments 24 = Fact intensive Inquiry 1) Barred if the 2nd suit is out (in part or whole) of the same transaction, or series of connected transactions, out of which the action arose 2) Transaction can be determined by considering whether the facts are related in time, space, origin, or motivation Federated Dept Stores (D) v Moitie (P) US SC 1981 Exceptions to Res Judicata FACTS P filed class action suit for price-fixing against D. Dismissed by 12(b)(6). 5 other Ps appealed and won, other P (Moitie) brought another suit into Cal state court but removed to Fed DC. Dismissed on res judicata, 9th cir reversed on public policy and simple justice. SC dismissed on res judicata. ISSUE Is there an exception when appeal reversed decision of similar case? RULE No, barred by prior decision, but appeal is fine. P made their choice to forgo appeal. You cannot question decision through another claim. They made their bed, deal with it. Preclusion is strict. NOTE MESSAGE of Moitie is that So what if the law changed? The ruling will stay the same Reed v Allen cited in Moitie case - dispute over property rights left in will. Suit 1 A wins interpleader action and gets rent B appeals and wins rent Suit 2 A ejects B from property B should have appealed ejection Suit 3 B tries to eject A; A pleaded res judicata which was allowed by court b/c property belonged to A B should have appealed Suit 2, so both issues could be heard at once, since they did not, res judicata applies Rinehart v Locke US CoA 7th Cir 1971 On the Merits
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FACTS 1st Suit P brought complaint against D for his arrest of impersonating police officer, dismissed on failure to state a claim (12(b)(6)). Attempted to amend, but was denied. 2nd Suit P brought a claim against Ds for an arrest which deprived him of his constitutional rights. DC dismissed action based on res judicata. 2 complaints were identical except 2nd one alleged arrest was made w/out probable cause. ISSUE Is res judicata allowed for failure to state a claim dismissals? RULE No, if P fails on demurrer in his first action from the omission of an essential allegation in his declaration which is fully supplied in the second suit, the judgment in the first suit I not bar to the second. Restatement 50. Rule 41(b) says the following are the only dismissals that are not on the merits: lack of jurisdiction, improper venue, or failure to join party under Rule 19, unless otherwise noted in decision. This rule is not looked upon as exclusive. On the Merits Unless: -jurisdiction, venue, indispensible parties, or claim brought in wrong court Semtek As a matter of federal law, the state court in case 2 has to apply the state law of the forum state in which the federal diversity court sits in case 1. Other Actions Pending parties can sometimes file 2 or more suits of the same claim in different courts (called repetitive suits); why? Doubts to the jurisdiction Concerns about missing SoL Desire to forum-shop according to choice of law and other pre-trial determinations Sometimes to harass the other party Can use defense of other action pending to seek dismissal of one of the actions
With or Without Prejudice:

ON THE MERITS side of Claim Preclusion Spectrum On the merits ---------------------------- 12(b)(6) Motions ---------------------------Not on the merits (Full trial verdict (Lack of Personal & Judgment) Jurisdiction) 12(b)(6) on the merits When you get something dismissed, the court will usually specify if its with or without prejudice. If its with prejudice is means that you cant take it back to relitigate. Without prejudice means that you can come back and initiate a new suit. remember to keep an eye out if something was dismissed with prejudice or not*
What do we have to show for claim preclusion? (what did you bring up/could have brought up?) Same Claim? (Manego) same transaction, same facts underlying each. Same Parties or those in privity with them. Judgment has to be final On the Merits
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Issue Preclusion
Restatement 27- When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim. Issue must actually be litigated and the determination must be valid, final, and essential to the judgment. o Essential to judgment- some issues do not affect the outcome of the case. Res judicata does not have to be actually litigatedit has to be a final, valid judgment on the merits What is not actually litigated? o Stipulations (parties will often stipulate the facts, they are never litigated) o Admissions under Rule 36. o Some criminal guilty pleas are not going to be litigated. Collateral estoppel refers to issue preclusion in a second action on a different claim. Direct estoppel refers to issue preclusion when the prior action was on the same claim. Restatement 28 enumerates several factors that may call for allowing relitigation of an issue, even though it was actually litigated and determined and essential to prior judgment. These factors fall into two broad categories: o Indication that the proceeding in which the issue was decided before was insufficiently likely to produce a ruling worthy of preclusive effect. o Public interest considerations that support revisiting the prior determination. Relitigation must be justified for some reason other than just doubt about the rightness of the particular ruling. If it is impossible for you to get an appellate court to consider possible error in ruling against you , you should not be held to it. Purpose of Collateral estoppel o To protect parties from the burden of relitigating issues, protects the court. Issues already litigated may come up in later litigation based on separate events collateral estoppel will preclude litigation of that issue even though res judicata is inapplicable. Collateral estoppel is somewhat broader than res judicata because it can foreclose litigation of a particular issue in a new context.
Restatements 2d of Judgments 29 Judgments for D exceptions to the general rule of bar A personal judgment for the D, although valid and final, does not bar another action by the P on the same claim when: When judgment is for lack of jurisidiction, improper venue, or nonjoinder/misjoinder of parties When P agrees or elects a nonsuit without prejudice or the court directs that P be nonsuited or action be dismissed without prejudice When by statute or rule of court the judgment does not operate as a bar to another action on the same claim or does not so operate unless the court specifies and no such specification is made -Bars relitigation of issues that were litigated in a prior action, issues must be essential to litigation -Different than claim in following senses: Applies to issues not claims, so action can be a completely unrelated claim and it can still apply
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Only prevent the relitigation of issues actually raised in the prior action, does not bar claims that could have been brought up in the first as in claim preclusion Actually litigated No reqs of same party -Despite these goals are same: promote finality and repose and to prevent duplicative litigation Requirements 1. The previous judgment must have been valid, final, and on its merits 2. The issue must have been actually litigated in the first action and necessarily decided by the court 3. Determination of that issue must have been essential to the courts judgment a. if there are two findings (bus hypos), take the other finding as a given and see if this one was necessary for the outcome What does issue mean? - Findings of fact - Findings of law negligence, contributory negligence - Common sense meaning component parts of a case Costs of the doctrine - We could have a wrong result in the first case Actually Litigated What do you look for to see if an issue is actually litigated? - Look at the record to see if it was litigated - Look at the pleadings (complaint and answers) - Look at the elements of the claim - Jury instructions - SJ, 12b6 motions, JML motions What if SJ was granted but no evidence was presented on it? Was it actually litigated? - Yes. Because there are affidavits and evidence presented. What about motion to dismiss? - Yes. Settlement? - Not actually litigated dont have issue preclusive effect - But sometimes there is consent decree where the judge formally records what was agreed upon so it can be enforced later
What do we have to show for Issue Preclusion: Same Issue Was this actually litigated and decided? Did judge/jury actually decide this issue, and was essential to the judgment?
Little v Blue Goose Motor Coach Ill. SC 1931 FACTS Little was riding motorcycle and collided w/bus owned/operated by Blue Goose. 1st Suit Blue Goose sues Little for damages to bus and won. 2nd Suit Little sues Blue Goose for personal injuries. In process of suit, he dies. Executrix amended to wrongful death and willful and wanton negligence. Blue Goose tried for issue preclusion and lost. ISSUE Was the 2nd suit precluded by the 1st? RULE Yes, it does not matter that new action was for wrongful death or new P. Issue in first was Littles negligence, which was determined and final. 1st action determined that Little was negligent and BG was not, so you cannot try BG again to see if they were negligent.
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Need to look at what was determined in the first suit and what the theories in the 2nd and compare them to determine if there is preclusion. we want to see what was actually decided in the first case. We are looking at the first decision and seeing whether judge was specific about BASIS of the decision, or what was logically included in the reasoning. Hardy v Johns-Manville Sales Corp. US CoA 5th Cir 1982 Diff Parties and Issue Preclusion FACTS Borel determined: 1) asbestos is dangerous, 2) causes mesothelioma and asbestosis, 3) no warnings were issues prior to 1964, and 4) warning standard was not me by Borel from 64 to 69. Different P and D. Suit 2 P (Hardy) brings claim against D. P was granted collateral estoppel (victory) order that certain issues had been determined in their favor in Borel. CoA reverses. SC affirms CoA decision. ISSUE Was collateral estoppel properly administered? RULE No, 3 reasons 1) CE not appropriate when prior judgment ambivalent (no idea when jury decided a duty to warn should have started); 2) CE only applies to issues of fact or law decided by prior court, we cannot say Borel decided all manufacturers knew or should have known the dangers at all times; and 3) Ps in this case were from broad range of jobs, some products will be different. Due process right for full and fair opportunity to litigate issue. Halpern v Schwartz US CoA 2nd Cir 1970 FACTS Suit 1 Creditors filed for involuntary bankruptcy for P on 3 reasons (transferred bond and mortgage to son to delay creditors, transfer by insovant w/out fair consideration, and preference-paymnet of any antecedent debt). DC found for creditors on all three and granted bankruptcy. Referred to trustee in bankruptcy. Suit 2 P (Halpern) sued D (trustee) for discharge, trustee moved for SJ to deny. Granted b/c of USC 32(c)(4) when party transferred any property to hinder or delay, must deny discharge. st ISSUE Was 1 reason in Suit 1 enough to preclude decision in 2nd to discharge? RULE If there are multiple issues that can be in themselves decide the 1st case, then just looking at one to determine if it precludes a 2nd decision is not allowed. When asking for appeal, they dont look at each individually they look at them at a whole and deny/grant appeal. They may have won if just looked at one individual issue. If you say that you care precluded on all three of these, you are saying that you have to appeal to all three of them, which would counter the purpose of collateral estoppel to minimize litigation.
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Claim Preclusion: a final judgment forecloses successive litigation fo the very same claim, whether or not relitigation of the claim raises the same issues as the earlier suit. Issue Preclusion: Bars successive litigation of an issue of fact or law actually litigated and resolved in a valid court determination essential to the prior judgment.
Persons of Privity/ Virtual Representation Taylor v. Sturgell, US Supreme Court Persons of Privity/ Virtual Representation
Facts: Greg Herrick made a FOIA request to retrieve F-45 specifications from the Federal Aviation Administration (FAA). The FAA denied his request, however, and prevailed in the subsequent litigation on the ground that the requested documents fell under a statutory trade secret exemption. Less than a month after the final decision in Herricks case, Taylor a friend of Herricks and a member of the same vintage aircraft association filed an identical FOIA request with the FAA. . The FAA did not respond to Taylors request, prompting him to file a complaint based on the FAAs constructive denial of his FOIA request. Issues: What is the standard for virtual representation? Reasoning: everyone should have his own day in court. Exceptions to Non-Party Preclusion: 1. First, [a] person who agrees to be bound by a judgment will be bound according to the terms of the agreement. 2. Second, a variety of pre-existing substantive legal relationship[s] between a non-party and party, such as bailee and bailor, or assignee and assignor, can legitimately bind a non-party to a judgment. 3. Third, a non-party may be precluded from bringing her own claim when she was adequately represented by someone with the same interests who served as a party to a previous suit. Justice Ginsburg identified class action suits and suits brought by trustees, guardians, and other fiduciaries, as proper examples of adequate representation. 4. Fourth, a non-party who assume[s] control over a case may be bound by the judgment in that case. 5. Fifth, a party may not relitigate an issue by using a proxy a scenario that would include a non-party bringing suit as an agent for the previous party. 6. Sixth, special statutory schemes may prohibit repetitive litigation by non-parties if the scheme is consistent with due process. Virtual representation, represents a unique exception to the ban on non-party claim preclusion that reaches far beyond the six exceptions delineated in the Courts opinions.
Control - Control is having effective choice as to the legal theories and proofs to be advanced in behalf of the party of action. -Does not mean: having the same lawyers, being party of the trial by testifying, financing litigation, participated in pretrial, or in any other way.
75 Mutuality of Estoppel
-Original theory was a person should not benefit from collateral estoppel unless he would also have been bound by the prior judgment. -Now We care about the DUE PROCESS RIGHTS of the Parties! -Care its preclusion is used as offensive or defensive Bernhard v. Bank of America, Supreme Court CA 1942, non-mutual defensive issue preclusion FACTS Sather signs over her savings to be put in acct in her name controlled by Cook. Cook then takes the money and puts in his own acct. Sather dies. Probate court ordered an accounting. Case 1 Executor, Cook, wants court to sign off on his distribution. This is essentially Cook v. Bernhard (heirs) Heirs object: they say that the money he took is part of the money to be distributed. Probate court says its a gift. Case 2 Bernhard, as administratrix, brings case on behalf of estate. D is Bank who wants to rely on issue preclusion. P says different parties. Trial court ruled for D and Supreme Court (Traynor) affirms on IP ISSUE Should the rule of mutuality in issue preclusion be applied strictly? RULE No. No good reason for the requirement of mutuality. Courts have recognized exceptions in cases of vicarious liability (master/servant, employer/employee) and indemnification. Tripartite test for the validity of res judicata: 1. Was the issue decided in the prior case the same one as in this case? a. Same issue: ownership of money 2. Was there a final judgment on the merits? Y Blonder-Tonge v Univ of Illinios Non Mutual Defensive IP Court abandoned mutuality as a matter of federal law, at least by using it as a defensive way. Justified through efficiency reasons and court is not worried about the due process of P anymore because they had their day in court in the 1st suit (misallocation of resources). Docket control also cases pending. However, non-mutual offensive IP should be treated differently. Parklane Hoisery v. Shore - US SC 1979 - non-mutual offensive IP FACTS Case 1: SEC v. Parklane; claim: Parklane has lied to its shareholders through a misleading proxy statement. Court finds D lied. Case 2: Shore v. Parklane; same thing. ISSUES 1. Can a litigant who was not party to a prior judgment use that judgment offensively to prevent D from re-litigating and issue decided against him in the prior trial? 2. Does use of offensive collateral estoppel violate 7th amendment in this case? RULE Litigant can use collateral estoppel offensively. This can be murky, so lets give trial courts broad discretion in applying it. Factors to consider (against IP): 1. Could P have easily joined the first action? a. In reality, courts do not strictly enforce this. Excuses are easy to make 2. Application of IP would be unfair to D a. If there is procedural advantage in case 2 thats not available in 1 b. Inconsistent judgments if judgment relied upon for estoppel is inconsistent with previous judgments c. If D did not vigorously litigate case 1 (it was for small $$)
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Shore was filed first, but SEC came to judgment first - Generally whichever is decided first is case 1 Theres a good argument for unfairness to D - In case 1 they couldnt get a jury and here they would be able to - Majority says that presence of a jury as a fact finder is essentially neutral o Preposterous reading: it doesnt make a difference if you have a jury or not o Better reading: presence of a jury doesnt favor one party over another This is a shareholder action against a shady corporation. How much would a jury actually help? But if they want a jury they should be able to get one. What about the 7th amendment? - Majority: Weve allowed innovations elsewhere, and we will allow them here as well. Times change. This isnt really unfair. - Rehnquist: 7th Amendment only preserved what rights existed at the time (1791). - There was mutuality requirement back then, so D would have been able to get a jury then Why is non-mutual offensive issue preclusion shady? - It does not promote judicial economy in the same manner as defensive (P is incentivized to wait and see how the trial turns out rather than join the pending trial). o Famous example: train wreck; first 25 Ps sue RR and RR wins all of them; however P 26 wins (maybe a rogue jury). What happens to P 27? None of these Ps are precluded from bringing their claim. RR cant use issue preclusion against any of them because it would violate due process. If we allow offensive non-mutual issue preclusion, 27-50 can rely on 26th case and will all win. This is unfair to D. This also highlights the judicial economy incentive. Due Process: you cannot ever use issue preclusion against someone who was not a party in case #1. - Also the unfairness arguments highlighted in the test Is that ever not the case that Ps are incentivized to wait? - If D has only limited money - Money: for D, a loss in case 1 is worth (if each injury is $1000) $50K. So the advantage of going first is settling. P has good leverage. Early P can extract a preclusion bonus. Federal Law of Preclusion - Non-mutual defensive IP is a go - Non-mutual offensive IP is a maybe (district court discretion) Berhard/defensive non mutual collateral estoppel A v. B o B wins A v. C o C Argues C.E. Parklane/Offensive non mutual collateral estoppel A v. B o A wins C v. B o C Argues C.E.
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Intra/Inter-jurisdictional Preclusion
States have their own preclusion laws. - Not all states have abandoned the mutuality doctrine. Some states say defensive is ok, but offensive is not. Not all states use transaction test - you can split tort and contract claim because they assert different rights 4 different situations where this problem arises: 1. state (1) to state (2) 2. state to federal 3. federal to state 4. federal to federal Two Questions: 1. which law applies? 2. What is the content of Preclusion law Generally, a federal court should refer to the preclusion law of the state in which the judgment was rendered. CASE 1 NY state NY state NY state NY fed diversity NY fed question CASE 2 CA state CA fed Q CA fed diversity CA state CA state WHOSE PRECLUSION LAW DOES COURT 2 APPLY TO DETERMINE PRECLUSIVE EFFECT OF CASE 1 CA court will look at NY preclusion law LEGAL AUTHORITY
NY fed q NY fed Q
CA fed q CA fed div
NY fed div NY fed Div
CA fed div CA fed Q
Article IV: Full faith and credit and Semtek NY state law; check statute for exceptions 1738 Federal Court will use NY law 1738 NY state Semtek federal common law Federal law there are no state interests. Preclusive effect of You also want uniformity. Problem arises a federal judgment when state courts decide fed Q. is determined by federal common law (Sup Ct) Federal preclusion law Federal common law Federal preclusion rules. It never really Federal common matters where case 2 is. You are trying to law figure out preclusive effect of case 1. It will always be determined by federal preclusion rules when case 1 is federal. NY state preclusion Fed common law NY state preclusion (we would run into a forum shopping problem for case 1 otherwise)
State to State Article IV: Full Faith and Credit Clause - CA court must give NY judgment the same preclusive effect as NY court would have
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So CA court would look to NY preclusion law
State to Federal NY State to CA (fed Q) - federal court applies NY state preclusion law - 28 USC 1738 full faith and credit statute o federal court must give full faith and credit to state judgments - Habeas is the big exception 1. State-Federal Issue Preclusion 28 USC 1738 Full faith and credit statute Marrese v American Academy of Orthopedic Surgeons SC of US 1985 State-Federal IP FACTS P were denied entry into academy, so they sued. Suit 1 P brought claim in Ill state court for common law associational rights. Dismissed for failure to state cause of action. Suit 2 Brought in fed court claiming fed antitrust law. CoA held claim preclusion. ISSUE Whether state court judgment has preclusive effects on fed courts? RULE Look at state laws of preclusion instead of fed rules. Interpreting 1738. There are exceptions; you look to the statute to determine if exception applies. Process: 1) Look at state laws to see if it is precluded, then 2) look at fed statute to see if there is an exception in the statute. General Rule If case 1 is in state court, second court will apply preclusion laws of state 1 2. Federal-State Issue Preclusion Semtek International v. Lockheed Martin, SCOTUS 2001 FACTS Suit 1 P (Semtek) sued D in California state court, alleging breach of contract and various business torts. It was removed to fed CD California based on diversity, and was then dismissed on the merits and with prejudice because it was barred by state 2 year statute of limitations. Suit 2 P brought the same case in Maryland state court, where it wasnt barred because the SOL was 3 years. D wants res judicata. ISSUE What is the claim preclusive effect of a federal diversity action on a subsequent state action and how do we determine it? RULE D argues that FRCP 41(b) controls. 41(b) says that unless otherwise specified by the court, a dismissal other than for lack of jurisdiction, improper venue, or failure to join a party under rule 19, operates as adjudication on the merits. This reading would violate the Rules Enabling Act (abridging rights). Furthermore, using this interpretation of 41(B) to control would violate the Erie doctrine. This would be outcome-determinative and encourage forum shopping, as any out-of-state D that is sued on a state claim would remove to federal court. Federal common law determines the IP effect of diversity action. Since state law is at issue, there is no need for a uniform federal rule. As a matter of federal law, the state court in case 2 has to apply the state law of the forum state in which the federal diversity court sits in case 1. However, the federal reference to state law does not apply where federal interests trump the state law. NOTE SOL is treated as substantive for Erie purposes Scalia uses a narrow reading of 41(b) to say its not on the merits. But a broader reading would violate the Rules Enabling Act and the Erie Doctrine.
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Erie: If CA court said that dismissal for SOL doesnt have claim preclusive effect, then a diverse D would always remove to federal court. If its decided in federal court, it is claim preclusive and P couldnt re-file anywhere else. If state law is applied, P could re-file elsewhere. So this would abridge rights (Rules Enabling Act). Also forum shopping: if you can get it removed, P cant re-file again anywhere else.
What does the balancing loophole mean? - No one knows. Scalia wants to leave an opening for bad state rule. So 2 main reasons for the rule: 1. Uniformity of federal law is not a real issue since we are dealing with state substantive law 2. A contrary rule would pose an Erie problem CASE 1: NY fed div, CASE 2: CA fed div The reasons of Semtek apply. Its all about what the effect of case 1 is. If case 1 were in state court, then case 2 would apply case 1 state law (because of full faith and credit statute). So the result should not change because case 1 was brought in fed diversity.
CLASS ACTIONS FRCP Rule 23 - for some injunctive relief - For a large amount of $ Need Joinder Rule 20 Need a certain # of Ps 28 USC 1332 Class Actions Need a minimum of $5,000,000 Can have an aggregation Rule parties add up to $5M Need MINIMAL diversity Removal Of Class Actions - In general class action can be removed to DC of US

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Anatomy of the Litigation

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Defendants Responses FRCP 8(b) and 12

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C. Most Favored Defenses-may be raised at any time

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Affirmative Defenses Rule 8(c)

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FRCP Rule 11 Signing pleadings, motions, representations to the court, sanctions

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3. 11(c)(1) In General: court may impose an appropriate sanction on an attorney,

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Amended and Supplemental Pleadings Rule 15

V. AMENDMENTS TO PLEADINGS A. Rule 15: Ways of Amending:

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11 c. Issue 1: Can court grant 12(b)(6) motion to dismiss based on statute of

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o (a)(3)- DISCLOSURE OF WITNESSES

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Summary Judgment Rule 56

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Choosing the Forum: Geographic Location

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Statutory Limits of Personal Jurisdiction: (Long-arm statutes and 14th Amend)

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Forum Selection Clauses

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30 c. Legal Cause: Will P have to rely on something P did in the forum

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Subject Matter Jurisdiction

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